Delaware’s unemployment rate rose to 7.3 percent in March as labor market officials cautioned about reading too much into short-term figures. The jobless rate a year ago was 7 percent.
“Month-to-month movements in economic data, especially in a small state, tend to contain as much noise as information. It is always best to keep the longer trends in mind when assessing new data. This month, the business survey data show a drop of 3,100 jobs from February; however, that follows a gain of 1,500 jobs in February, and 3,800 jobs.”
The higher jobless rate may also be the result of more “discouraged workers” who had dropped out of the labor market and are now looking for work, the report from the Delaware Department of Labor stated. This pattern is common when a recovery is taking place.
The Labor Department reported 2,100 discouraged workers during the first quarter of this year, compared with 2,700 a year ago and 3,800 at their peak in the first quarter of 2010. The rate of job growth in the state is only slightly below the national average.
George Sharply of the Delaware Department of Labor, said 2013 is shaping up to be a difficult year when it comes to predicting the future course of the labor market. He noted that strong figures in January and February partially were offset by a week job market performance in March.
At the same time, the general trend is on the up side, Sharply said.
One unknown is the effect of the sequester-related cuts in the federal budget. Reduced federal spending will affect the job market, Sharply said, although he added that the private sector could take up some of the slack.
Despite figures indicating that more people have gone back to work, the jobless rate is expected to lead to concern about the health of the Delaware economy and deals such as the state loan to Fisker Automotive.
Fisker had planned to assemble a car at a former GM plant near Wilmington. Fisker has laid off most of its employees and industry analysts are predicting it will file for bankruptcy protection.
Also, the state is seeing a narrowing of the gap between its jobless rate and the nation’s unemployment rate. (That gap has narrowed to .3 %, a change from the days when the Delaware jobless rate was 1 percent below the federal number.
The rise in the rate triggered an additional period of unemployment benefits for the long-term unemployed in the state, whose benefits had run out. How long unemployment benefits are extended is based on the unemployment rate of a state.
