Economist: Vermont needs more job gains
By THATCHER MOATS
VERMONT PRESS BUREAU | September 20,2011
MONTPELIER — Vermont has steadily added jobs over the last three months, according to Vermont Department of Labor figures, but the unemployment rate also has crept up during the same period, putting the seemingly conflicting trend lines on the same path.
Jeffrey Thompson, an economist at the Political Economy Research Institute at the University of Massachusetts at Amherst, says this shows the job growth in Vermont simply isn’t robust enough to slow the rise in the unemployment rate.
“To me that paints a picture that it’s not about the surveys being off, it’s this picture of, ‘Yeah, you’ve got some job growth, it’s just not enough,’” said Thompson, who observes Vermont’s employment trends.
The number of jobs added and the unemployment rate are determined with separate surveys of different groups. The jobs-added figure is determined with a sample survey of businesses; the unemployment rate is based on a sample survey of households, said Thompson.
If it were a one-month sample, said Thompson, the figures wouldn’t amount to much, but the continued trend tells him Vermont needs greater net gains in jobs to stave off a rising unemployment rate.
As people enter the workforce from high school or college or from other states, jobs need to be created for the unemployment rate to remain steady or drop.
“You need job growth all the time just to soak up the growing population,” said Thompson.
The new unemployment rate was issued Friday and shows a rise to 5.9 percent, from 5.7 percent. The August numbers mark four months of a rising unemployment rate in Vermont.
Before that, the rate had trickled steadily downward for months from a high of 7.3 percent in May 2009.
Thompson did not want to weigh in on the fears of a double-dip recession and whether the unemployment figures showed that was happening.
But he said the figures show a rebound is not under way.
“The only strong thing to take away from this for Vermont specifically is that obviously we can’t rest assured things are OK,” said Thompson.
Art Woolf, an economics professor at the University of Vermont, was less willing to draw a conclusion based on the employment figures.
He said he relies less on unemployment numbers than he used to and said the jobs numbers are preliminary.
“These are estimates, they are preliminary, and they will be revised either up or down,” Woolf said.
Woolf said preliminary job numbers from the first quarter of 2011 showed a huge bump of 5,000 jobs in a month, which has turned out to be untrue. “We now know that did not happen,” he said.