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County, state unemployment rate up a smidgen in April

May 22nd, 2011 Bussines

By Patrick McCreless

pmccreless@annistonstar.com

While unemployment rates for Calhoun County and the state increased in April, the jump may actually be due to economic improvement and statistical error, experts say.

Since January, unemployment rates in counties throughout the state have experienced a kind of yo-yo effect — decreasing one month only to increase the next — a possible indication more unemployed persons are reentering the search for work and being counted again in surveys because they are seeing improvements in the job market. Slight fluctuations in how the statistical models are used to compile the unemployment figures each month could also be contributing to the monthly changes.

“Some of it could be sampling variation and some is the economy growing,” said James Cover, professor of economics at the University of Alabama.

According to the Alabama Department of Industrial Relations, which did not include effects from the April tornado outbreak in its latest report, the county’s unemployment rate increased to 9.1 percent in April from 8.8 percent in March. The county’s March rate was a decrease from a 9.6 percent unemployment rate in February.

The state average unemployment rate rose to 9.3 percent in April from 9.2 percent in March.

The national unemployment rate increased to 9 percent in April from 8.8 percent in March, which in turn was a slight decrease from the 8.9 percent rate in February.

“It appears that Alabama followed the national trend this month, as we experienced a slight increase in our unemployment rate,” said DIR Director Tom Surtees in a press release. “As I’ve noted before, these kinds of minor fluctuations are to be expected as we emerge from a recession.”

The unemployment rates for the county and state increased in April, but they are still lower than what they were during the same month last year. Calhoun had a 9.5 percent unemployment rate in April 2010 while the state had a 9.8 percent unemployment rate.

Like Surtees, Cover suspects the minor fluctuations in state unemployment rates could be due to improvements in the economy.

“As more people find jobs, more people follow them and try to re-enter the workforce,” Cover said. “People are seeing things slowly improving, so they start looking for jobs.”

The DIR statistics, which are provided by the U.S. Department of Labor, tend not to count unemployed persons who have completely stopped searching for work. When those people start searching again, they can cause increases in unemployment rates, even though there was not a significant job loss.

Cover added that the statistical models used to compile the unemployment rates could be slightly skewing the figures.

“They don’t get enough observations from the state of Alabama, so they also use a statistical model to come up with the rate,” Cover said.

Those mathematical models can cause slight fluctuations in statistics, he said.

Cover noted, however, that he expected the economy to weaken more in the coming months due to high gasoline prices.

“Gasoline prices I think will slow things down,” he said. “I don’t see how it could not.”

Star staff writer Patrick McCreless: 256-235-3561.