Business/Economy

Alaska job losses continue, but unemployment drops as well

JUNEAU -- For the second month in a row, Alaska has lost jobs, but evidence of that isn't showing up in unemployment numbers. The statewide unemployment rate was 6.4 percent in September, compared to 6.8 percent in September 2014. The number of people claiming unemployment benefits continues to shrink as well.

During August and September, the state posted job losses of more than 1,000 compared to the same months last year. As recently as July, the state was adding 1,000 or more jobs per month compared to the previous year.

Both months also saw thousands of job losses compared to the month before, but that's typical for this time of year as seasonal construction, tourism and fishing industries wind down.

Chief among the industry sectors losing jobs was the state government, including the university, which together saw declines of 1,500 jobs during those months. Retail trade also saw declines.

The state currently has about 350,000 jobs, with 25,600 of those in state government and another 7,800 in state education, mostly the university system.

Some state politicians trying to cut budgets are concerned that cutting too much or too quickly would damage the economy, while not cutting them enough would risk exhausting state savings and result in an even more abrupt crash later. Legislators fought over how to address those concerns until June, when they finally sent Gov. Bill Walker a budget that took effect July 1. However, some state administrators had stopped hiring even before the new fiscal year began, anticipating lower budgets.

Last week, Walker said he doesn't think the cuts that have been made so far -- and cuts expected in next year's legislative session -- will send Alaska into a recession. He said the budget cuts last year came to about 19 percent, but isn't ready to say what he'll propose for next year.

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The number of state jobs now appears to be "tanking," acknowledged Caroline Schultz of the Department of Labor and Workforce Development's Research and Analysis Section.

But she cautioned against putting too much reliance on them. The September numbers are preliminary and both months' numbers come from a survey sample and are subject to revision later when actual numbers are tallied.

Schultz said it is possible, and perhaps even likely, that the job declines are not as big as the early numbers show. But one number she does have confidence in is the state jobs number, which isn't an estimate based on a sample.

People leaving the state can contribute to the low unemployment rate and an improving Lower 48 economy could mean that Alaskans who lose their jobs may be able to quickly find new jobs Outside.

"I don't know why our unemployment levels are so low, but it is possible that there is some out-migration going on," she said.

The number of Alaskans reported as unemployed in September was 20,710, down markedly from the previous September's 22,754. And new unemployment claims are continuing to come in low, said Lennon Weller, a Labor Department economist who tracks unemployment insurance claims.

One point of good news, Schultz said, is that a long-term trend of federal job losses in Alaska seems to have stopped.

"The federal government job losses have pretty much ended, if not reversed, in the summer months and are being replaced with state government jobs losses," she said.

One other area in which jobs may be trending down is the oil and gas industry.

Total jobs in that industry declined by 100 and 200 in August and September compared to 2014, she said, reversing a long-term trend of rising employment. New unemployment claims for the industry are also up, Weller said.

"It's showing the first signs of a little softness, which perhaps isn't a surprise given the announcements that some of the big companies have been making, and given the prices right now," he said, referring to oil prices, which have crashed.

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