State jobless rate at 8.7% in July, up from 4.6% a year ago

Send to friend

Journal Sentinel, Milwaukee, WI

By Joel Dresang

Published: 08/20/2009

Along with encouraging signs Thursday that the downturn may be easing up in Wisconsin came indications that the job market won't bounce back quickly.

Wisconsin employers cut 114,000 jobs in the last 12 months, the biggest drop-off for July in records dating back to 1940. But it marked the second month in a row that the rate of job losses slowed.

Without adjusting for seasonal fluctuations, Wisconsin's unemployment rate was 8.7% in July, up from 4.6% a year ago, according to a state Department of Workforce Development report.

Also worrisome: Nationally, new claims for unemployment insurance benefits continue to rise. The U.S. Labor Department said Thursday that initial claims rose to 576,000 last week, up 15,000 applications from the previous week. Analysts had expected a decline.

Through the first 33 weeks of 2009, initial applications for jobless benefits in Wisconsin already have exceeded the total for all of 2008.

"I'm sorry Wisconsin's economy is in that situation, but many other people are in that boat," said Rick McHugh, staff attorney for the National Employment Law Project, which advocates for longer federal assistance through unemployment insurance.

McHugh said that his organization projects that about 10% of 6.2 million Americans receiving jobless benefits will exhaust their payments next month, including more than 10,000 in Wisconsin.

"People just can't find work, and we just need to admit that that's the situation and then it's also not going to not get well quickly because hiring will be the last thing that will happen in the recovery," McHugh said. "We have an unprecedented level of long-term unemployment in this country."

Typically, employers take time to hire again coming out of recessions. And as prospects for work improve, jobless workers who had been on the sidelines get back into the labor market, adding to the clog of jobseekers until they find work again.

Following the last recession, which officially ended in November 2001, Wisconsin's seasonally adjusted unemployment rate kept bouncing up until early 2003 before starting to head down again.

"We don't think it's going to be a robust job recovery," said Dennis Winters, chief economist for the Department of Workforce Development. "A lot of the consensus is that we are out of recession or will be shortly. Now, it's not going to feel like that to those who are out of work. As one economist said, this is going to be the sort of economic recovery that only a statistician would love because the numbers are going to be slight. It's not going to be a huge rocket out of here."

Mixed news from the state report Thursday included the biggest 12-month manufacturing job decline in data going back to 1990. Factories cut 57,800 jobs since July 2008, an 11.6% reduction.

From its July peak in 1999, Wisconsin manufacturing employment has fallen by 26%.

The only major sectors that didn't suffer losses since July 2008 were leisure and hospitality, which had been posting year-to-year job deficits for 18 months in a row, and educational and health services, with its smallest gain since September.

The Associated Press contributed to this report.

View original story here.