Area jobless jump mirrors state increase

By: Bryan Gentry | Lynchburg News and Advance
Published: March 20, 2008

The Lynchburg area’s unemployment rate in January jumped to 4 percent, a high the area hasn’t seen since fall 2005.

The change mirrored a statewide jump. Virginia also had its highest January unemployment rate since 2005 — 3.8 percent.

But there is good news: both local and statewide unemployment is much lower than the nation’s rate of 5.4 percent.

Also, Lynchburg’s non-farm job growth outpaced the state in 2007, according to William F. Mezger, chief economist for the Virginia Employment Commission.

He said the December-to-January unemployment rate increase could have a lot to do with timing.

“Most of that increase was seasonal,” Mezger said. “The rate normally goes up from December to January, as you go from one of the best months of the year to one of the worst months of the year.”

He said retail, leisure and hospitality industries tend to cut back at the end of the holiday season.

The local unemployment rate fell through most of 2007, reaching 3 percent in September and October.

It rose slowly for two months, then went from 3.4 to 4 percent at the end of the year.

The end-of-year unemployment jump was greater in Charlottesville, and less in Roanoke, according to Virginia Employment Commission data.

Mezger said college breaks also can drive up unemployment. The reference week for the unemployment survey in January occurred while local colleges were still on break, meaning some food services and maintenance employees might have temporarily been out of work.

Population growth can boost an unemployment rate, too, if people move into an area before they find a job. “While they’re looking for work, … that adds a little bit to unemployment.”

He said that has been the case in Northern Virginia in recent months, though he’s not sure whether growth has played a factor in the Lynchburg region’s unemployment.

Mezger did say that the Lynchburg region typically benefits from strong job growth. Last year, the number of non-farm jobs grew by 1.8 percent in and around Lynchburg.

Non-farm jobs grew by just 0.7 percent in the state.

“Lynchburg, as an area, was growing over twice as fast as the state as a whole,” he said.

And the state is being spared much of the unemployment ills that many in the United States are feeling.

The national unemployment rate reached 5.4 percent in January, according to the Virginia Employment Commission.

Only three small states —Hawaii, Utah and Idaho — had average unemployment rates lower than Virginia’s last year, Mezger said.

“Of the 13 largest states, Virginia has by far the lowest unemployment,” he said.