The Buffalo Niagara job market is better for job seekers than it’s been in nine years.
The region’s unemployment rate fell to 4.5 percent during June, dipping below 5 percent for the second straight month and the third time since the recession began nine years ago, the state Labor Department said Tuesday.
The Buffalo Niagara unemployment rate was nearly a full percentage point lower than it was a year ago, when the jobless rate stood at 5.4 percent.
Moderate job growth, coupled with a shrinking labor pool caused largely by a stagnant population and a wave of retirements among the region’s older workers, has helped push jobless levels down steadily since unemployment peaked at 8.6 percent in June 2012.
“It bodes well for the rest of the year,” said John Slenker, the Labor Department’s regional economist in Buffalo.
While unemployment tends to rise from June to July as the number of seasonal workers peaks, it typically dips again in August and September.
“It’s kind of an indicator of how the rest of the summer will be,” Slenker said.
And with hiring slowly growing among local employers at a time when the labor force is shrinking, the unemployment rate had its second-biggest drop from one June to the next in the past 26 years.
That left the jobless rate at its lowest point for any June since 2001. June’s 4.5 percent unemployment rate is within shouting distance of the region’s modern-day low for the month, which hit 4.1 percent in June 2000.
The local unemployment rate was up slightly from 4.4 percent in May, but the two months are not directly comparable because the jobless data is not adjusted for seasonal factors. Unemployment dipped as low as 3.8 percent in October 2000 and hovered between that and 4.3 percent for the final 10 months of 2000.
The decline in unemployment during June comes as the region has slowly but steadily added jobs since late 2010, including an increase of 4,900 jobs from June 2015 to June 2016 that some local economists believe may understate the actual gains in employment experienced by the region.
“Between the job gains and the drop in the unemployment rate, these are trends that aren’t going to burst,” Slenker said.
The unemployment numbers, which are based on a different survey than the job data, can be fairly volatile and also come with a margin of error that approaches 0.5 percentage points one way or the other.
The drop in the Buffalo Niagara jobless rate mirrored the decline in unemployment across New York, where the unemployment rate fell to 4.5 percent from 5.5 percent in June 2015. The local jobless rate was lower than the national average of 5.1 percent. None of the unemployment rates are adjusted for seasonal factors.
Other upstate metro areas also had big drops in unemployment, with the jobless rate in Rochester decreasing to 4.3 percent from 5.2 percent in June 2015; Syracuse falling to 4.5 percent from 5.5 percent a year ago; and Albany falling to 3.9 percent from 4.6 percent a year ago.
Pushing down the jobless rate in the Buffalo Niagara region was a combination of fewer unemployed people and the rising number of individuals with jobs. The number of people in the region who don’t have a job but were actively looking for one fell by 18 percent, or 5,500 people, from June 2015 to June 2016, the Labor Department said. That was the lowest for any June since 2000.
At the same time, the number of people who were employed during May rose by less than 1 percent, or 2,700 people, to the highest level for any June since 2010. That left the pool of available workers in the Buffalo Niagara region at its lowest level in at least 26 years, with the local labor force shrinking by 2,800 workers during the past year. It was the first decline in the local labor force since October.