Buffalo Niagara unemployment rate jumps to six-month high after August job losses

The steep job losses that hit the Buffalo Niagara region during August pushed the local unemployment rate up to a six-month high.

The region’s jobless rate jumped to 3.8% during August – up from 3.3% in July and up a full percentage point since April – after a surprisingly steep job loss during August, the state Labor Department reported Tuesday.

The spike in unemployment pushed the jobless rate to its highest level since February, when it stood at 4%. But the August jobless rate still is below the 4% unemployment rate in August 2022.

Overall, unemployment levels across the region remain low by historical standards, with the local jobless rate falling below 4% during 14 of the last 17 months. Between 2000 and September 2018, there were only two months when the local unemployment rate fell below 4%.

The jump in unemployment follows a disappointing August jobs report that showed the region lost 5,300 jobs on a seasonally adjusted basis last month. The decline was so severe that it wiped out every job that previously had been added during 2023 and brought the local job market back to where it was at the end of last year.

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Still, local economists, while surprised by the severity of the job losses, were hesitant to cast the decline as a sign that the region’s tight employment market was reversing course and heading into a sustained decline.

“It might be more of a seasonal thing,” said Timothy Glass, the Labor Department’s regional economist in Buffalo. He noted that the region has almost 6,000 more jobs than it did a year ago, even after the August decline.

“We’re still up over the year,” he said. “We’re still getting closer and closer to where we were before the pandemic,” although the region still has more than 2% fewer jobs than it did before Covid. The U.S. recovered all of the jobs lost during the pandemic last year and has been growing since.

A big part of the August job losses could stem from the return of students to classes, said Julie Anna Golebiewski, a Canisius College economist. Hiring accelerated rapidly during the early summer as students returned and companies snapped them up to take on positions that they had long struggled to fill, only for many to leave those jobs as classes resumed.

The unemployment data, which is compiled from a different survey than last week’s jobs report, also included evidence that’s happening. The number of people holding jobs dropped by 5,400 – virtually identical to the August job losses. And the region’s labor force shrunk by 3,000 people – a decline that is much steeper than typically occurs between July and August.

At the same time, there was a sign of weakening within the job market. The number of people who want a job but said they couldn’t find one grew by 2,400 workers, topping the 21,000 mark for the first time since February and putting it only slightly below the level of August 2022.

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