Private Sector Employment Slipped and the Unemployment Rate Rose Again
West Virginia's labor market continued to struggle in September, with private sector employment declining and the state's unemployment rate rising — in both cases, for at least the third month in a row. What is perhaps most disconcerting is the breadth of the decline that took place in employment across sectors. While there were some exceptions (most notably government), just about every major sector suffered employment losses during the month. While the labor market in aggregate has been drifting downward all year, rarely have so many sectors been involved at the same time, raising a concern that the weakness in the state’s labor market may be taking root and will be more difficult to reverse than presumed in earlier monthly reports.
The state lost 3,200 jobs in September, according to the seasonally adjusted establishment survey, which was the largest monthly decline since June 2011. All of those job losses were in the private sector. In fact, the loss of roughly 3,200 jobs in the private sector makes September the second worst for job losses since April 2009, behind August's decline of 3,500. Putting the last two months in perspective, of the nearly 12,000 private sector jobs lost since state employment peaked in January of this year, nearly half of those losses have come in the last two months.
Looking across sectors, the only major pocket to escape the employment losses in September was the government sector. Even that distinction is far from encouraging. For example, while total government jobs were flat in September, the level of government employment in August was only slightly higher than in July, which was the lowest level of the year. And while federal government employment in the state was virtually unchanged, gains in state government employment were essentially offset by losses in local government employment. In other words, while government jobs held up better than most other industries during the month, they have not been excluded from the downward trend in employment since the start of the year. Indeed, of the 16,000-plus jobs lost statewide since January, one quarter has been government jobs.
Not surprisingly, given the loss in jobs, the state's unemployment rate increased again in September, rising to 7.6 percent. While the level compares favorably with the national unemployment rate of 7.8 percent for the month, the two were headed in opposite directions as the national rate declined in September, while the state's rate rose for the sixth consecutive month. Contributing to the latest rate rise was an increase in the number of people looking for work, after the labor force had been shrinking over the previous five months. While the most recent rise in job seekers had only a small effect on the unemployment rate, it represented yet another factor that has turned against the state's labor market. If all those who left the labor market since the start of the year — roughly 4,500 people — return over the remainder of this year, they will only make it more difficult to reverse the adverse trend in the unemployment rate. On balance, problems in the state's labor market seem to be rising at a time when the nation as a whole seems to be holding out the promise of improving labor markets.