What is Maine’s Unemployment Rate? July Update
As I blogged previously, Maine has shattered the record for consecutive months of declining labor force. Between June and July, Maine’s labor force shrank by 2,020 marking the sixth straight month of declining–the previous record was five months.
Additionally, the large decrease in the labor force also puts Maine very close to the record for the largest absolute decrease in labor force. That record was set during the 1991 recession when the labor force shrank by 11,280 workers. Adjusting for the larger labor force today, would mean Maine’s labor force would have to shrink by around 12,500. The labor force since January 2009 has lost 11,030 workers. If we have another month of shrinkage over 2,000 as we did in July, that record will also fall.
Finally, getting to the main point of the blog (no pun intended), Maine’s shadow unemployment rate climbs from 9.7 percent in June to 9.8 percent in July. The shadow unemployment rate is now 17 percent higher than the “official” rate of 8.4 percent and is now significantly above the national unemployment rate of 9.4 percent (click “continue reading” to view chart).
When looking at the underlying data, it appears there is some good news in that the number of unemployed fell by about 1,500 people. However, the number of folks employed also fell by about 500 people. Where did they all go? They dropped out of the labor force. Overall, this is a very dismal showing for Maine’s economy as it is easier to turn around unemployment than it is to increase the labor supply.