Delaware’s jobless rate worse than national average

DOVER — January marked the fifth month in a row that the state’s unemployment rate has held at 4.5 percent, according to a monthly Department of Labor report released on Tuesday.

In comparison, the nation’s unemployment rate is now down to 4.1 percent.

However, Dr. George Sharpley, chief of the Office of Occupational and Labor Market Information, says the state is in a marginally better position than it was during the same time period last year.

“The number of employed residents went up by 3,000, but that’s historically a fairly low number,” he said.

The unemployment rate clocked in at 4.6 percent in January 2017. At the time, it was lower than the national average by 0.2 percent, but the roles have since reversed.

“Overall, Delaware’s numbers are showing the same picture it has been: the economy is pretty sluggish,” said Mr. Sharpley.

The report says 2018 has started off well with an increase of 700 employed residents, an unemployment rate remaining at 4.5% and 2,300 net new jobs at employers in the state. But, it notes that some caution is warranted because over the past seven years initial January job changes averaging 1,800 jobs were eventually revised to 700, with four of those revisions moving the job change in the opposite direction.

“January is always a tricky month because of seasonality — I wouldn’t attach too much hope to these the numbers,” Dr. Sharpley said. “We’re showing 2,100 new jobs created from December to January, but the reality is that there were 11,400 fewer jobs in January. It’s just that the seasonal expectation is for that number to fall by 13,500 or so. It makes it look like a job gain, but in fact you’re looking at how bad the loss was compared to seasonal expectations.”

Dr. Sharpley feels, for good or ill, that state’s unemployment rate will likely follow national trends. It’s been widely reported that the national jobless rate is currently at a 17-year low and is beginning to exert upward pressure on average wages.

“I’ve been saying for awhile that the weakness in Delaware is more of a temporary thing — as long as the national economy kept growing, Delaware would pull out of it and start growing too,” he said. “But, I’m just not nearly as sanguine now that the national economy will keep growing.”

Trade wars and interest rates

Tariffs on steel and aluminum — recently proposed by President Donald Trump — and the possibility of an increase in interest rates will likely have an affect on the nation’s and Delaware’s economy, Dr. Sharpley said.

“News about the tariffs is throwing a real monkey wrench into things,” he said. “Along with the expected increases in interest rates, there’s a real chance of slowing down the national economy. In which case, it’s unlikely that Delaware’s economy would buck that trend.”

Although he says the tariff would be unlikely to affect Delaware’s chief industries directly, any slowdown in the national economy would likely cause bank earnings to slump.

“The biggest impact would probably come first on the state’s bank industry which is its biggest by far in terms of GDP,” said Dr. Sharpley. “Banking will be affected by any general economic slowdown.”

Depending on the outcome of tariff proposals, Dr. Sharpley said it’s possible that Delaware’s industries may find itself more directly targeted. The Associated Press reported that Europe is preparing seemingly retaliatory tariffs on Harley-Davidson motorcycles, bourbon whiskey and Levi’s jeans. If chicken producers were to feel the squeeze — as they did when Russia banned imports of U.S. chicken in 2014 — the state could feel a more direct impact, claims Dr. Sharpley.

According to a recently released Delaware Agricultural Statistics Bulletin, the state is the nation’s eighth largest producer of “commercial broiler” chickens by poundage and 11th by number of birds — accounting for 3.4 percent and 2.9 percent respectively of the nation’s total production.

Facebook Comment