Valley mirrors U.S. jobs picture
Local residents are flooding into One-Stop offices looking for work or retraining opportunities.
STAFF/WIRE REPORT
The recession is keeping its bite on the local and national economies.
New federal statistics show unemployment claims jumped more than expected last week and home construction fell to a record low in December.
The Mahoning Valley has been hurt by both job losses and a lack of construction, officials said.
“It’s not a pretty picture out there,” said Bert Cene, executive director of the Mahoning and Columbiana Training Association.
So many layoffs have occurred in Ohio that two weeks ago the state’s Web site for registering for unemployment benefits crashed from too much use.
Locally, people are flooding into area One-Stop agencies looking for work or retraining, Cene said. Visits are up 50 percent compared with a year ago.
In addition, staff at the One-Stop agencies in the Mahoning Valley, run by the Ohio Department of Job and Family Services, have met with about 2,500 people who have lost their jobs last month and this month.
Most of those have been related to reduced production at General Motors’ Lordstown complex. GM shut down the complex for all of January and is restarting it with 2,000 fewer workers. Suppliers also are laying off hundreds of workers.
Cene said the cutbacks are starting to reach out to other parts of the economy. Smaller manufacturers are laying people off because of the economic slowdown. Retailers, such as Circuit City and Linens-N-Things, are closing stores.
Steven Lewis, president and chief executive of First Place Bank in Warren, said cutbacks by automakers are affecting a wide variety of businesses. Restaurant owners, for example, are telling him business is down.
Even people who still have jobs are nervous, he said.
“People are not spending as freely as they did before,” he said.
The Labor Department reported Thursday that initial jobless benefit claims rose to a seasonally adjusted 589,000 in the week ending Jan. 17, from an upwardly revised figure of 527,000 the previous week. The latest tally was well above Wall Street economists’ expectations of 540,000 new claims.
The total matches a 26-year high reached four weeks ago. The last time claims were higher was in November 1982, when the economy was emerging from a steep recession, though the work force has grown by about half since then.
The increase is partly due to a backlog of claims that piled up in recent weeks in several states that experienced computer crashes due to a crush of applications, a Labor Department analyst said. The four-week average of claims, which smooths out fluctuations, was 519,250, the same as the previous week.
But the layoffs continued Thursday. Microsoft Corp. said it will cut up to 5,000 jobs over the next 18 months as profit tumbles amid weakness in the personal computer market, and chemical maker Huntsman Corp. will slash 1,175 jobs this year, representing more than 9 percent of its work force, to reduce costs as demand slows amid the global economic downturn. Salt Lake City-based Huntsman also plans to cut an additional 490 contractors.
First-time jobless claims dipped over the holidays after reaching 589,000 in the week ending Dec. 20. Most economists attributed the decline to unusual seasonal factors, such as below-average holiday hiring by retailers due to the recession. That meant fewer workers were laid off afterward.
“It is clear from the latest numbers that the underlying trend in claims is still upwards,” Ian Shepherdson, chief U.S. economist for High Frequency Economics, wrote in a research note. “We have no hope that the peak is anywhere near.”
Another sign of the deepening recession came in a Commerce Department report that showed new-home construction plunged 15.5 percent to a record low last month. Construction of new homes and apartments fell to an annual rate of 550,000 in December, below analysts’ expectations of 610,000.
The report capped a miserable year for new home construction. Builders broke ground on 904,000 units last year, also the lowest since records began in 1959.
Housing starts in Mahoning and Trumbull counties fell from 367 in 2007 to 249 last year, a 32 percent drop, statistics from the Home Builders-Remodelers Association of Mahoning Valley show. Back in 2004, builders put up 881 homes locally.
Joshua Aikens, HBA executive director, said he expects housing starts to stay steady this year.
Lewis, from First Place Bank, said most people are opting for existing homes if they want to move because prices their prices have dropped.
The Obama administration is proposing to extend jobless benefits, which typically last about six months, and overhaul the unemployment insurance system as part of an $825 billion stimulus package being considered in the House.
The weak job market has caused millions of laid-off workers who have exhausted their unemployment insurance to seek benefits under an emergency federal extension of the program authorized by Congress last June.
More than 2 million Americans requested benefits under the extended program in the week ending Jan. 3, the most recent data available. That’s in addition to the 4.6 million people covered under the regular unemployment insurance system, though the 2 million figure is not seasonally adjusted and is volatile.