Thursday, June 23, 2011

Mass layoffs fall 25 percent in Colorado, new jobless claims fall 15 percent

Mass layoff events fell 25 percent to 45 events during the first five months of 2011 in Colorado. There were 60 mass layoff events during the same period last year. According to a new report released Wednesday by the U.S. Bureau of Labor Statistics, there were 10 mass layoff events during May 2011, which is the same amount as occurred during May 2010.

Monthly mass layoff events grew rapidly after October 2008 in Colorado, and have gradually lessened since early 2010.



Nationally, mass layoff events increased 0.9 percent from 1,354 during May 2010 to 1,364 during May of this year.

In the year-to-date total for May, mass layoffs have now fallen two years in a row after peaking at 86 mass layoffs during the first five months of 2009. The first graph shows year-to-date totals for May since 2001:



Mass layoffs were rare from 2004 through most of 2008.

Overall, the most recent mass layoffs dats suggests that the employment situation continues to stabilize. New layoffs continue to lessen, but as we've seen in the most recent employment data, job growth continues to disappoint.

New jobless claims

New claims for unemployment insurance rose year over year in may by 14 percent to 1,171 in May. There were 1,024 new claims during May of last year. New claims for unemployment insurance have also gradually fallen since early 2010. The 14 percent increase in May, compared to May of 2010, is substantially higher than the year-over-year change at the national level. However, it is too soon to know if this increase indicates any sort of new trend.

As can be seen in the third graph, year-over-year changes in new unemployment claims points toward more and more stability in the labor markets as most year-over-year changes has been below zero since late 2009.



In year-date totals for new unemployment claims through May, totals are down 15 percent year over year. There were 4,987 new claims during the first five months of 2011, compared to 5,926 new claims during the same period last year. In the year-to-date total for May, new claims for unemployment insurance have now fallen two years in a row after peaking at 8,087 claims during the first five months of 2009. The last graph shows year-to-date totals for May since 2001:



Analysis

In spite of the 14 percent year-over-year increase in new claimants for May alone, the year-over-year comparisons clearly show that both new claims and mass layoffs are down from both 2009 and 2010 so far this year. However, total employment in Colorado is still 190,000 jobs below peak levels. New layoffs and new unemployment claims continue to fall, but there is little job creation going on at the same time to provide re-entry into the workforce. The fact that recent layoffs are such a small portion of the total number of jobless persons suggests that those people who are unemployed have been unemployed for an extended period of time. (The most recent Colorado employment data states that there are 226,000 unemployed workers in Colorado.)