Jobless figures up, but not by much

By Charles Sowell  

SEPTEMBER 27, 2010 2:16 p.m. (0)

A crisis of confidence and uncertainty about major federal legislation is helping to drive state and national jobless figures upward, said an economist with the University of South Carolina this week.

South Carolina’s jobless rate inched up to 11 percent in August, up from 10.7 percent in July, according to state figures.

“That’s not statistically significant,” said John McDermott, chair of the economics department at the Darla Moore School of Business at the University of South Carolina. “While it is distressing that joblessness is up, the actual increase (0.3 percent) is quite small and can be explained through a variety of things like people coming back into the job market.”

Another factor is that joblessness seems to be concentrated among younger people with low levels of education, he said. “You look at the jobless figures for recent college graduates and it’s at about 5.5 percent, which is close to normal.”

According to the state Department of Employment and Workforce (SCDEW) the August state jobless rate is 1.1 percent below a year ago figures.

Supporting McDermott’s theory about more people looking for work are state figures that show an increase in the total labor force (employed minus unemployed) of 4,629, which is the first increase in the labor force since March.

For August the number of employed persons declined 1,716 (0.1 percent and the number of unemployed rose 6,345 (2.76 percent).

“Right now business is sitting on an unusually large pot of money (liquidity is currently at 6.2 percent and the normal rate is 4.4 to 5 percent),” McDermott said. “They are holding on to their capital because of uncertainty in the markets and fears about coming changes in things like financial regulation, health care and environmental policies.”

Most of those uncertainties will be resolved by Jan. 1, he said, and business will be able to plan adequately.

“A lot of people are wondering how the recession could be over when the jobless rates are going up,” McDermott said. “Point is the jobless figures are all over the board nationally. North Dakota, for instance, has a jobless rate of about 3.7 percent while Nevada’s numbers are 14.4 percent. To be sure things are still bleak in many parts of the country, but there is reason for optimism.”

He pointed to an overall upward trend in the stock market over the past few months as indicative of an improving economy.

Many of the jobs that are going begging are for skilled and educated workers, McDermott said. Most of the jobless numbers are concentrated among people with little education and low job skills.

“Despite high unemployment, we still have lots of jobs available statewide,” said John L. Finan, executive director of the state Department of Employment and Workforce. “During the month of August, South Carolina had over 116,000 jobs available around the state. Of these, there were 29,188 job openings in the Columbia metropolitan area alone, a little over 24,000 in the Greenville-Spartanburg area and about 19,000 in Charleston.”

State figures show the overall job count was 12,600 more than a year ago. The monthly survey of jobs showed a growth of 20,100 nonagricultural jobs. The government sector was up 22,300 mostly from teachers and staff returning from summer break.

Private sector jobs slid 2,200 in August and business and professional jobs were down 3,800; leisure and hospitality fell 3,300. Gains were recorded in retail, up 500; construction up 600; manufacturing up 700; and in education and health services up 1,500 and health care and social assistance up 1,800.