Unemployment rates in St. Louis and Springfield dropped slightly in May compared with the same month a year ago, while the rates rose slightly in Columbia and Cape Girardeau and were flat in Missouri’s other metropolitan areas and in the state overall.
The state’s May jobless rate, 6.7 percent, is still 1.2 percentage points higher than in May 2008, the first year of the economic recession, according to the Bureau of Labor Statistics. Most metro areas need to reduce the rate more than a percentage point to get back to the 2008 benchmark, although Columbia is within 0.7 percentage points of its 4 percent rate from five years ago. Analysts said changes in labor force and economic policies are contributing to the the slow recovery.
Unemployment rates in St. Louis and Springfield both declined 0.3 percentage points year over year, to 7 percent and 5.7 percent, respectively. Cape Girardeau’s rate increased from 6.2 to 6.5 percent, and Columbia’s rate climbed from 4.5 percent to 4.7 percent in May. Kansas City’s unemployment rate stayed at 6.5 percent.
The falling unemployment rate in St. Louis could be caused by the number of people who gave up looking for jobs or moved away, Peter Mueser, professor of economics at the University of Missouri, said.
St. Louis’ labor force fell 0.36 percent to 1.415 million from 1.42 million in 2012, according to the BLS data.
“This isn’t a sign of strength, but of general weakness,” David Mitchell, director of the Bureau of Economic Research at Missouri State University, said.
Springfield’s labor force rose almost 1.3 percent compared to last May. The Springfield economy is relatively insulated from national changes, Mitchell said.
“It didn’t experience a lot of the growth in housing prices and in the economy in general; therefore, it has done fairly well in the recovery,”Mitchell said. “It also has a large concentration of its economy dependent upon health care which has continued to do very well.”
Five-year rises in unemployment rate indicate weak recovery
In the long run, unemployment rates in St. Louis and Springfield both rose 1.1 percentage points, from 5.9 percent and 4.6 percent in May 2008. Columbia was at 4.7 percent in May, up from 4 percent in May 2008. Cape Girardeau’s rate increased to 6.5 percent from 5.3 percent in 2008.
The long-term view of unemployment reflects the state’s slow healing process from the recession. The tepid recovery is being driven by population changes and economic policies on the federal level, Mitchell said.
While the demographic factor remains hard to change, “the economic polices coming out of Washington, including large increases in regulations, are having a negative effect on the economy, investment and savings,” Mitchell said.
Columbia’s unemployment rate experienced the smallest five-year growth and stayed the lowest among all the metro areas in Missouri. Its labor force rose 5.3 percent to 98.4 thousand, from 93.4 thousand in May 2008. It was the biggest percentage increase among the state’s metro areas.
The prevalence of the health care sector and large proportion of college students in Columbia should explain the area’s low unemployment rate, Mueser said. Health care and education, which are important industries for Columbia, are not tied tightly to the business cycle. Unlike the manufacturing industry, which suffered big drops in employment around the country, hospitals and universities are slower to lay off workers, Mueser said.
College students also contributed to the low unemployment figure in Columbia. “Students usually scramble to get jobs, especially in summer,” Mueser said. “They tend not to be unemployed for very long.”