Delaware unemployment rises slightly

DOVER — Delaware’s unemployment rate has risen by a tenth of a percent for the second consecutive month, according to the February Labor Review released by the Delaware Department of Labor on Friday.

The state’s seasonally adjusted unemployment rate is 4.5 percent, up from 4.4% in January. There were 21,100 unemployed Delawareans in February.

However, the unemployment rate is below the February national average of 4.7 percent, which was down from 4.8 percent in January.

“Pennsylvania just put theirs out as well and theirs dropped two tenths of a percent, but that only brought it to 5 percent,” said Office of Occupational and Labor Market Information chief, Dr. George Sharpley. “So even though they went down and we went up, we’re still half a point below our neighbor to the north.”

Dr. Sharpley said the upward trend isn’t part of any drastic changes, but rather signs of a slowing economy and seasonal changes.

“This is the most difficult time of year to seasonally adjust data because weather can vary a lot,” he said. “It’s also clear that the economy has definitely slowed, but it’s not clear to me that this is the beginning of a trend. My guess is that we’ll bounce around a little without seeing drastic movement in either direction.”

Both the federal and state budget proposals also hint toward possible economic constriction, says Dr. Sharpley. Gov. Carney’s recently announced $4.096 billion budget includes slightly higher income taxes, hikes in property taxes and cuts in money going to school districts.

“The economy reacts to spending,” he said. “The basic model of economic activity is the circular flow model — when spending from any party: business, government or from households is reduced then economic activity slows.

“Unless there are increases in business investment and consumer spending to offset decreases in government spending, and I don’t really see that happening, I would expect that the effect of the proposed budgets to cause economic growth to slow.”

Another concern Dr. Sharpley has is that the pace of wage growth has slowed, which is a trend that should be moving in the opposite direction.

“The latest payroll data is showing a slowdown in wage growth — it’s only around about 2 percent wage growth now,” he said. “We don’t have the full 2016 data in yet, but wages should be rising faster as we’re reaching full employment. It’s a little worrying that they’re not.”

Veterans employment rising

State veterans have seen a significant drop in their rate of unemployment for the last few years.

“A few years ago there were reports that soldiers coming back from Iraq and Afghanistan were having trouble getting jobs and I was getting requests almost daily asking what their unemployment rate was,” said Dr. Sharpley. “That data was available nationally, but the Bureau of Labor Statistics wasn’t making that data available at the state level. Finally they did agreed to do it, and we have a better idea how they’re doing.”

According to the report, there are 77,700 veterans in Delaware, with 12,800 of them having served in the Gulf II era (since Sept. 2001). From mid-2013 to mid-2014, the state unemployment rate for non-veterans was 6 percent. For all veterans the rate was 4.6 percent, but for Gulf II veterans it was 10.4 percent.

Over the past few years that rate has steadily declined and now (as of February) rests at 2.7 percent — even lower than that of other veterans and non-veterans.

Dr. Sharpley thinks that this is partly because many of these veterans were entering the work force at the same time in 2013-14.

“When you have a lot of soldiers returning from the war that’s winding down, you have more people entering the work force at once,” he said. “It’s like pouring water into a funnel, if it happens too fast, it’ll back up.”

However, he thinks that many community driven efforts also had significant impact on the drop in jobless rates.

“Surely credit is due for the efforts of many who helped this happen, but simply publishing data also helped to raise awareness, spur action, and finally show these encouraging results,” said Dr. Sharpley.

Reach staff writer Ian Gronau at igronau@newszap.com

You are encouraged to leave relevant comments but engaging in personal attacks, threats, online bullying or commercial spam will not be allowed. All comments should remain within the bounds of fair play and civility. (You can disagree with others courteously, without being disagreeable.) Feel free to express yourself but keep an open mind toward finding value in what others say. To report abuse or spam, click the X in the upper right corner of the comment box.