David Robinson
The unemployment rate across the Buffalo Niagara region inched up to 4.8% during February as workers started looking for jobs in greater numbers than employers could hire them.The jobless rate, which isn’t adjusted for seasonal factors, was the highest since it stood at 5.3% in August 2021, when the local job market was still reeling from pandemic-related job losses, according to data released Tuesday by the state Labor Department.The region’s unemployment rate has been rising steadily since last April, when it fell to 3% and the number of workers who wanted a job but couldn’t find one was at its lowest level in at least 33 years.Since then, however, overall employment levels have dropped, while the number of workers who are actively looking for a job but can’t find one has jumped by 60%. Still, an unemployment rate below 5% is low by historical standards for the Buffalo Niagara region.
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Why the rate is risingThe region’s rising unemployment rate stems from several factors. One is the continued growth of the Buffalo Niagara workforce, which has nearly 8,000 more people than it did a year ago.That’s a positive development for the region’s overall economy, which has been held back during the post-pandemic recovery by a shortage of available workers that made it difficult for employers to hire as many employees as they wanted.Those issues have put a damper on job growth across the region over the last few years, leaving Buffalo Niagara with more than 4,000 fewer jobs than it had before the pandemic. In contrast, the nation had recovered all of its lost jobs during the summer of 2022 and has since grown by more than 3%, according to the U.S. Bureau of Labor Statistics.While hiring has been running locally at a roughly 2% annualized pace, economists said employers also may be turning more cautious about adding additional workers.The Federal Reserve Board has boosted short-term interest rates to cool the economy and bring down inflation. Expected rate cuts have been delayed, possibly into June, as consumer prices continue to rise faster than the Fed wants.Over the past year, the region has gained almost 8,000 workers as more people are seeking jobs. But overall employment levels have increased by only about 4,200 people – or a little more than half of the workforce growth.That has helped push up the unemployment rate as employers have failed to fully absorb the influx of workers over the past year.”It isn’t totally clear to me that the rise in the number of unemployed is due to a structural unemployment scenario, where the employers who are hiring are just not able to find people with the skills that they’re looking for,” said Julie Anna Golebiewski, a Canisius University economist. “I think it’s more of a frictional unemployment, where it’s taking new entrants into the labor force just some time to find a job.”Seasonal factors also may be contributing to the increase. The unemployment rate during February typically is the highest – or close to the highest – for any given year. Jobless levels typically decline as spring turns to summer.In addition, the region has not seen a significant spike in layoffs. The number of workers filing for unemployment benefits for the first time across Western New York is roughly on par with levels of a year ago, although they have increased by more than 80% from their lows during the late summer of last year.
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