State labor officials say the state’s seasonally adjusted unemployment rate stood at 6.7 percent in December, compared to the national rate of 4.7 percent.
Within the Valdez-Cordova census area, the revised not seasonally adjusted unemployment rate for October 2016 was 8.7 percent, compared with 10.3 percent in November of 2015.
The Alaska percentage was essentially unchanged from November’s 6.8 percent.
The not-seasonally adjusted rate of 6.5 percent in December was down from November’s 6.6 percent, according to the Alaska Department of Labor and Workforce Development.
Statewide unemployment rates fell in eight boroughs and census areas, rose in 16 and were unchanged in five. Skagway had the highest number of unemployed in December, at 20.3 percent, while Sitka had the lowest, at 4.3 percent.
Preliminary employment estimates for December showed a decline of 7,600 jobs, compared to the same month in 2015, for a loss of 2.4 percent.
Oil and gas, construction and professional business services sectors experienced the bulk of private sector job losses, while state government drove public sector losses.
The only industry with notable growth in December was health care.
“The single sector in which we project economic growth next year is health care, and that sector is at risk if Congress repeals Medicaid expansion,” Labor Commissioner Heidi Drygas notes in the January edition of Alaska Economic Trends, (http://labor.alaska.gov/trends/jan17.pdf#cover).
Job losses are expected to continue in all sectors except health care in 2017, and that layoffs will accelerate in sectors including retail, a ripple effect of job losses impact aggregate demand and consumer spending, she said.
The loss of jobs in oil, construction and the public sector are causing further job losses in business and professional services, transportation, and leisure and hospitality, she said. “The contraction of demand for Alaska’s workers is so acute that even the growing tourism industry cant make up lost revenue for our hotels and restaurants.’
Drygas also said that the state’s economic health would be in peril if the Legislature fails to pass a sustainable budget. The state “could lay off every single state employee and still not balance the budget,” she said. “Cuts along are not sufficient and will result in a deeper, more prolonged economic decline than Alaska has ever seen,” she said.
State labor economist Caroline Schultz, writing in the January edition of Trends, said that 2017 will be characterized by widespread reductions in the service industries that depend on consumer spending, which will be dampened by lost wages and lower confidence.
The state is facing two major obstacles related to the drop in oil prices, Schultz said. They are a significant loss of jobs by employers sensitive to oil prices, and state government’s budget dilemma. The main uncertainty about the state’s economic future has less to do with oil prices, which are influenced by factors beyond the state’s control, and more to do with political decisions on the size and funding source of state government, she said.
