Although West Virginia began the year with an unemployment rate below the national average, that number has crept up in recent months.
“It’s been bouncing around for the past few months,” said Brian Lego, assistant professor of economic forecasting for West Virginia University’s Bureau of Business and Economic Research.
“It started off the year right below 5.9 percent in January and February, but ever since it’s been inching upward a little bit.”
According to WorkForce West Virginia, the state’s unemployment rate began the year a few points below the national rate until May when the state’s rate and national rate were both 6.3 percent. Since then, the U.S. unemployment rate has decreased while the state’s has increased. For July, the most recent month data is available, West Virginia’s unemployment rate is about 6.3 percent, while the U.S. rate is 6.2 percent.
As the economy continues to recover from the 2008 recession, more people are reentering the workforce. Lego said that contributes to the fluctuation in the state’s unemployment rate.
“The labor force is composed of two different numbers, employed and unemployed,” he said. “What happens often is when you have an increase in the unemployment rate, you have people who rejoin the labor force who don’t have jobs.”
In other words, the demand for jobs is greater than the supply. However, there are some areas of the job market that are growing and need skilled workers.
“Some of the ones that are the fastest growing are health care,” Lego said. “That’s a national occurrence. That industry hasn’t been growing quite as fast as it had over the past several years, but there’s still measurable job growth over the past year or so.
“Not just them, but the gas industry is also seeing a lot of fairly strong growth in pockets of the state, occurring mostly in the northwestern corner and Northern Panhandle where drilling activity has really picked up the most. You have some labor shortages there.
“I would also say another one, the generic name for it is professional business services. I wouldn’t say they’re suffering from labor shortages per se, but that one was hit by the recession. These are white collar research jobs. There are some people there who might be able to find work.”
Other portions of the country, Lego said, were hit harder by the housing bubble than West Virginia. As a result, the construction industry in those areas haven’t quite picked up and are seeing “varying degrees of labor shortage.” The story is a little bit different in the Mountain State.
“Our home building industry hasn’t been as robust,” he said. “We did have a downturn just like everywhere else in homebuilding activity. No one was able to get a loan as a result of the bubble busting but you’re still seeing an improvement. It’s just not the degree you see in Northern Virginia. The Eastern Panhandle has seen an improvement, but that’s a more dynamic area with more population growth in that area.”
Nationally, unemployed workers, especially those without jobs for six months or more, have the idea the workforce has improved more than it actually has. Lego said it will be interesting to watch over the coming months what happens to the unemployment rate as job seekers re-enter the job market when there may not be enough jobs available. Then there’s the coal industry in West Virginia.
“The major thing to watch is going to be the impact of announced layoffs in the coal industry,” Lego said. “More have happened in the past month or so. We’re going to have that play out and whether those people stay unemployed or drop out of the labor force will drive the unemployment rate in the state going forward.”
Contact writer Whitney Burdette at 304-348-7939 or whitney.burdette@ dailymailwv.com. Follow her at www.Twitter.com/wburdette_DM.
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