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Idaho jobless rate drops again as labor force declines

Idaho’s forecasted seasonally adjusted unemployment rate dropped for the fourth straight month in June, but the decline of two-tenths of a percentage point from May resulted from the first contraction of the statewide labor force in a year, state labor officials said.

June’s unemployment rate was forecast at 8.8 percent, compared to 9 percent in May and 7.9 percent in June 2009. The most recent rate matched the rate for October 2009 when unemployment across Idaho was climbing, to a peak of 9.5 percent this February. While down substantially from that peak, the rate is still the highest prior to this recession since July 1983. Unemployment a year ago was 7.9 percent.

Employers hired workers near the usual June numbers but did not create any new jobs, and the termination of federal extended benefits apparently led to hundreds of workers becoming discouraged and dropping out of the labor force, the Idaho Department of Labor said in a release.

The decline in the labor force – two-thirds of it because fewer people were counted as unemployed – coincided with the termination of extended federal benefits. Idaho saw 4,400 unemployed lose their benefits in the first week of June because Congress had not renewed the program. The labor force decline could reflect some of those long-term unemployed becoming discouraged about immediate job prospects and dropping out since there was no longer any financial incentive to keep looking for work in an economy that has not been generating new jobs, the Idaho Department of Labor said. To receive any unemployment benefits, claimants must be actively seeking a job, contacting at least two employers a week.

Over 41,000 checks for a total of $11.3 million in state and federal benefits were distributed to jobless workers in Idaho during the first week of June. Those numbers dropped to under 31,000 checks for $8.1 million this past week. Normally the seasonal decline in checks issued through June has been less than 2,000 except during recessionary periods when the June decrease reached 3,000 in 2003 following the 2001 recession and about 2,500 in 2009. Even though the payout is declining, $380 million in benefits has been paid so far this year.

Job creation in June was weaker than normal for the month, Idaho labor officials said. New hiring was 8 percent below June 2009 to mark the weakest June on record. While many private employers overall hired at their usual level for June, they did not create any employment beyond those seasonal jobs, and even that seasonal hiring was more than offset by the end of temporary employment for more than 1,400 Census Bureau workers.

That pushed total employment for June down 900 to 692,400 while the number of unemployed fell 1,600 to 66,700. The combination, which lowered the labor force down by a third of a percentage point, produced the lower unemployment rate forecast, which matched the two-tenths of a percentage point decline in the national rate to 9.5 percent. June marked eight years and nine months that Idaho’s rate has been lower than the national rate.

Total employment for the month of June was 3,600 higher than last year – the second month in a row employment exceeded year-over-year levels after 27 months of being below year-earlier levels.

The loss of census workers left the job gap essentially unchanged from June 2009 to June 2010 at less than 1 percent. That gap peaked at 7.3 percent last August, reflecting a year-over-year loss of nearly 50,000 jobs.

Manufacturers across the state met or exceeded their normal hiring levels for June as did most employers in professional and business services, private education and leisure and hospitality, the Idaho Department of Labor said. Government cut jobs by nearly triple the percentage typically shed in June, reflecting cuts made to accommodate tax revenues slashed by the recession.

Ten counties posted forecasted rates in double digits – the same as in May – with the highest at 12.6 percent in Power County, where apparently there were seasonal layoffs in food processing.

Seven counties had rates under 6 percent, also the same number as in May with the lowest in Teton County at 4.9 percent.

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