Just five days after reporting that the Buffalo Niagara job market had its worst month for job growth in seven years during September, the state Labor Department said the local unemployment rate fell to a 10-year low of 4.9 percent last month.
The two very different reports – one bleak, the other encouraging – were a sign of the cross-currents that are rippling through the Buffalo Niagara job market. The reports, on the one hand, signal a continued slowdown in hiring that has persisted throughout this year, but also indicate that the local labor market is tightening.
And the tightener job market, which makes it more challenging for companies to hire new workers with the skills they seek, could account for much of the slowdown in hiring this year, rather than a downturn in the overall economy that is causing businesses to fire workers because of slack demand for their products and services.
"The constraint isn't on business activity. It's on the labor force," said John Slenker, the state Labor Department's regional economist in Buffalo.
"It's a tight labor market," he said. "We're bumping up against a labor shortage."
The latest report, issued on Tuesday, said the local unemployment rate improved from 5.1 percent in September 2016 and dipped below the 5 percent mark for just the second time this year after spending half of last year below that benchmark. It was the lowest unemployment rate for any September since 2007. The report also revised the August jobless rate downward to 5.1 percent from the original report of 5.2 percent.
The report also indicated that some of the trends that have been shaping the region's job market since early 2016 reversed course during September.
* The local labor force, which has been shrinking consistently over the past five years as older workers retired and the region's population stagnated, grew by 2,300 people during September. That modest 0.4 percent increase was the first time the region's labor pool expanded since March 2016 – a period of 18 months.
* The number of unemployed people also hit a 10-year low for September and had its first year-over-year decline in 10 months. The number of workers who were actively seeking a job but couldn't find one fell by 2 percent, or 600 people, from September 2016 to September 2017. The number of unemployed people has dropped by 41 percent since 2012 as the local jobless rate has fallen from a peak of 8.1 percent.
*And despite last week's report that hiring slowed, the number of workers who said they had jobs during September increased by 3,000 people, or 0.5 percent. It was the first time since April 2016 that the region had more people employed than it did during the same month in the previous year.
None of the changes, however, are considered to be statistically significant, since the jobless rate has a relatively wide margin of error of at least a half a percentage point. So any change in the unemployment rate within that range could be explained by a statistical inaccuracy.
The unemployment rate had been inching up as the pace of hiring across the region has slowed since spring. After averaging about 1.4 percent during January and February, the pace of job growth has essentially stalled since March, including the biggest monthly drop in 7 years during September, according to Labor Department data.
Despite the improvement during September, joblessness remains higher in the Buffalo Niagara region than it is both statewide and across the country. The unemployment rate stood at 4.1 percent during September across the country and at 4.7 percent statewide.
Among the state’s 15 major metropolitan areas, only Watertown, Elmira, Binghamton and New York City had higher joblessness than the Buffalo Niagara region during September.