Nebraska unemployment numbers improving

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March 20, 2011 - 7:00pm

There's no doubt the Beatrice-area economy has taken a beating the last couple years, worse than most Nebraska communities.

It started late in 2008, when the Vise-Grip factory in nearby DeWitt closed its doors on more than 300 workers. As the recession started to hit hard in early 2009, some of the town's major employers - manufacturers like Store Kraft, NEAPCO and Exmark - were laying off dozens of workers at a time. A car dealership, retirement and nursing homes, and small retail stores all lost jobs after downscaling or closing. The final hit came last summer when Husqvarna shut down its Beatrice lawnmower factory, leaving more than 300 people without work.

Lori Warner, president of the Beatrice-area Chamber of Commerce, says at one point a couple years ago the local unemployment rate was as high as 9.8 percent, which was nearly double the state rate. Warner says the impact rippled through the community. "When you have people that aren't sure if they are going to have a job tomorrow, they stop spending because they have to start saving more than what they have in the past," Warner says. "They stop making those little extra trips to the store. They become more calculated with what they're spending. They are really on that tight budget. They tighten everything down because they don't know when the next job's going to come available for them. You don't have as many people attending events. You don't have as many people out just shopping in your downtown stores."

Fortunately for Beatrice, jobs have come available for some of these workers. The local unemployment rate is now closer to five percent. Improvement that's mirrored throughout the just-released Nebraska Department of Labor unemployment figures for January. The state unemployment rate is 4.2 percent. That's a slight drop from the previous month, the lowest in almost two years.

"Our numbers for January 2010 to January 2011 showed some strong stabilization, which is a good thing," says Catherine Lang, Nebraska Commissioner of Labor. "So, for example, we are 14 thousand more jobs over the year in total."

This includes a gain of 49 hundred jobs in business and professional services, an area Lang says was significantly hard hit by the recession. Another positive sign actually comes in the form of a decline in the number of jobs from December to January. Lang says that's normal, as temporary jobs added for the holiday season come to an end. But the decline this time was the lowest in five years. "So that's a pretty significant indicator to say perhaps, in terms of looking at how a normal in the last four years, a normal December to January drop, this was the smallest drop," Lang says. "So we were really pleased to see that."

Lang cautions, though, that we shouldn't expect a quick return to pre-recession unemployment rates of less than three percent. "I think we've all been put on notice from all of the economic brain power in our country that this was going to be a long and slow recovery" Lang says. "If we are seeing long and slow progress, then we believe that that is a good indicator. Long slow progress coming back out of what really was a very significant decrease in jobs."

One of those economists tracking Nebraska and the Midwest is Ernie Goss of Creighton University. Every month he offers perspective on the economic situation from surveys of bankers and supply managers . "It's showing that the state of Nebraska is adding jobs and we're seeing that across the region," Goss says. "And the region that I'm speaking of is the agriculturally dependent mid-section of the country, what we call the Mid-America region. And it has been adding jobs, but just not at a level that makes anybody real happy right now. The job picture's not as strong as we'd like to see, but it's a heck of a lot better than what we saw in 2008 and certainly right after the recession began in December of 2007. So things are looking better."

Goss says Nebraska might start seeing more significant job growth the second half of this year. But his optimism is tempered by two concerns. One is financial problems in European countries like Portugal, Ireland, Italy, Greece and Spain. "If we saw a default or even an impending default, a restructuring of the debt of any one of those countries, that would ripple back to this part of the country," Goss says. "The way it would happen is the value of the dollar would increase simply because there'd be a heck of a lot of safe haven buying. In other words, getting out of Europe and getting into the U.S. bond market. That would drive up the value of the dollar and drive down agricultural commodity prices, and it would hurt the farm sector and then the rest of Nebraska."

Goss' other concern is energy prices. "If oil prices got back up to 2008 levels, which got up to 147 dollars a barrel back in 2008, if we got that returned to that level, that would derail my optimistic output of increasing employment," Goss adds.

There's plenty of optimism these days in Beatrice. In a few days they'll celebrate an expansion at the NEAPCO plant. The manufacturer of vehicle drive-train components was one of the places laying-off workers two years ago. Now it's adding 90 jobs with the expansion.

Warner says the town is rebounding because residents took matters into their own hands. "People are out there looking and if they have to take two part-time jobs to make up for that one part-you know, that one full-time job, they do that until they can find something that's better," Warner says. "And I think that's really good. We have been very blessed in this area because we have a lot of people that have just ventured out on their own and started their own businesses looking at entrepreneurship, looking at how can I make sure that this doesn't happen to me again."

FAST FACTS:
Nebraska's January 2011 unemployment rate of 4.2 percent is the second-lowest in the United States, behind North Dakota (3.8 percent). Nevada has the highest unemployment rate at 14.2%. The national average is 9.0 percent.

ADDITIONAL INFORMATION:
Latest unemployment figures from the Nebraska Department of Labor
Nebraska Department of Labor "Workforce Trends" site
Creighton University Economic Outlook site

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