The Buffalo Niagara unemployment rate fell to 4.8 percent in October - its lowest level since May - as a tight labor market pushed the number of jobless workers close to a 17-year low.
The drop in the unemployment rate, which inched down from 4.9 percent in October 2016, is a sign that the Buffalo Niagara labor market remains robust, even with a report last week indicating that the region has lost jobs for two straight months.
The 4.8 percent unemployment rate is the second-lowest for any October since 2007, according to state Labor Department data released Tuesday. It also was just the third time this year the jobless rate dipped below the 5 percent mark after spending half of last year below that benchmark.
The contrasting reports are a sign of the cross-currents that are rippling through a Buffalo Niagara job market where workers are in increasingly short supply. Local economists believe the slowdown in hiring that has persisted throughout this year is more of a sign that employers are having trouble finding qualified workers than it is a sign that the local economy is slowing.
"I really think it does come down to the labor supply," said Gary Keith, M&T Bank's regional economist in Buffalo.
The report also indicated that some of the trends that had been shaping the region’s job market since early 2016 reversed course during September and continued into October.
• 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 600 people during October. That modest 0.1 percent increase was the second straight monthly increase in the region’s labor pool, which had shrunk for the previous 18 months leading into September.
• The number of unemployed people fell by 300 people to a two-year low and the second-lowest level since 2007. The number of people who are actively seeking a job but couldn't find one also has declined for two straight months and has dropped by 41 percent since 2012 as the local jobless rate has fallen from a peak of 8 percent.
• Despite last week’s report that hiring slowed, the number of workers who said they had jobs during September increased by 800 people, or 0.1 percent. It was the second straight month 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 consecutive declines in the job count during September and October, according to Labor Department data.
Despite the improvement during September, joblessness remains higher in the Buffalo Niagara region than the 4.6 percent unemployment rate statewide and the 3.9 percent rate across the country. The unemployment rates are not adjusted for seasonal factors.
Across the state, only Watertown, Elmira, and New York City had higher joblessness than the Buffalo Niagara region during October.