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Thursday, July 31, 2008

Virginia's jobless rate the highest in 4 years

Economic uncertainty and students seeking employment increase the numbers statewide.

Virginia's jobless rate in June, at 4.2 percent, was the highest state unemployment rate in more than four years, according to numbers released Wednesday by the Virginia Employment Commission.

The Roanoke Metropolitan Statistical Area's jobless rate also was up, at 4.1 percent, compared with 3.2 percent in June 2007.

Bill Mezger, chief economist for the VEC, said a struggling economy was but one factor driving the June unemployment rates.

"There were two main reasons for the increases," he said. "It was up momentarily because of the students who were actively looking for work in June and it's up too because of the slowing job growth in the economy.

"People who are unemployed just aren't moving back into the work force as quickly, so you're beginning to get some residue there," he said.

Students or new graduates seeking work rarely qualify for unemployment benefits but are counted among those looking for work, based on data from a monthly U.S. Census Bureau household survey.

Mezger said "students were out in force" during the week selected by the VEC as its reference period in June.

Meanwhile, the VEC reported that there were more Virginians working than ever before. Nonfarm employment in June totaled about 3,817,000, an "all-time record high," the commission said. In June 2007, nonfarm employment statewide totaled about 3,809,400, which was the previous high.

More people also were employed in June in the Roanoke MSA, which includes the cities of Covington, Salem and Roanoke, and the counties of Botetourt, Craig, Franklin and Roanoke.

If employment numbers have increased, why are unemployment rates higher?

"You've got a larger labor force than you've ever had," Mezger said.

In the Roanoke MSA, for example, the VEC reported 153,025 people were employed in June. But the civilian labor force numbered nearly 160,000. In June 2007, nearly 152,000 people were employed and the labor force was nearly 157,000, according to the VEC.

Earlier this month, Mezger said Carilion Clinic's expansion primarily was responsible for keeping job growth in the black for the Roanoke MSA during a time when manufacturing layoffs in the region continue.

Since 2005, the Roanoke MSA's annual average jobless rate has been in the low-to-mid 3 percent range.

The annual average unemployment rate for the Roanoke MSA for 2003 was 4.1 percent. Mezger said that rate captured lagging jobless numbers from the recession that followed the events of 9/11.

Mezger said the jobless rate increase in the Roanoke MSA should not be cause for alarm.

"Roanoke, all in all, is holding up pretty good," he said.

Jobless numbers also increased in June in the Blacksburg-Christiansburg-Radford MSA, jumping from 4.4 percent in June 2007 to 6 percent this June. Layoffs at the Volvo Trucks North America plant in Dublin affected the June figures, both for the Blacksburg MSA and the state, Mezger said.

He said he does not anticipate a big jump in jobless rates during the months ahead.

"In Virginia, usually June is the highest month," he said. "The normal pattern is for unemployment to drop during the fall."

Virginia's economy has four important economic sectors that Mezger said tend to be less vulnerable to economic downturns: defense contracting; health care; professional and business services; and public and private education.

Mezger said he doubts people will postpone sending their children to college "unless things get really bad."

The VEC also announced Wednesday that emergency extended unemployment benefits approved by Congress and funded by the federal government are available to Virginians who have exhausted all unemployment claims.

For those who qualify, extended benefits would last for up to 13 weeks. The checks would be for up to half a worker's earlier unemployment payment. The commission said it already has notified more than 58,000 Virginians of their potential eligibility and has processed 2,673 claims to date.

Joyce Fogg, a VEC spokeswoman, said the commission thinks its computer software already "has captured those who are eligible." But she said the VEC is talking to others who think they might be eligible.

More information about the emergency unemployment compensation program is available on VEC's Web site at www.VaEmploy.com or by calling (866) 832-2363.

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