Local experts weigh in on rising unemployment rates

The rate of joblessness is on the rise in Cape Girardeau, Perry and Scott counties, according to the latest available data from the state Department of Labor, even as unemployment overall remains at near-historic lows in Missouri.

County rates

Rob Gilligan

Rob Gilligan

• Cape Girardeau: 3.2% in June, up from 2.7% in May and 2.2% in April;
• Perry: 2.9% in June, up from 2.6% in May and 1.9% in April;
• Scott: 3.5% in June, up from 2.9% in May and 2.3% in April.

Of note

On a state level, July's unemployment rate of 2.7% is the highest in Missouri since December hit 2.8%.

Show Me State data continues to be notably below the most recent unemployment rate for the nation, 3.8% for August, the highest U.S. figure since December 2021's 3.9%.

David Yaskewich, chairman of Southeast Missouri State University's Accounting, Economics and Finance Department, suggested some context is required in looking at monthly jobless figures.

"About a year ago in September, Missouri reported the lowest state-level unemployment rate since data has been collected," said Yaskewich, a SEMO faculty member for more than a decade.

September 2022's statewide unemployment rate was recorded at a seasonally-adjusted 2.4% and at a non-seasonally adjusted rate of 1.8%.

Mix of factors

"Federal Reserve action brought the benchmark interest rate to its highest level in 22 years this summer to continue the battle on inflation (and) we are still in an environment where the overall goal to get down to 2% inflation has the historic effect of pushing up unemployment," said Rob Gilligan, president/CEO of Cape Girardeau Area Chamber of Commerce since April 2022.

"To be sure, economists tell us there's an inverse relationship between unemployment and inflation. In other words, as unemployment increases, inflation decreases."

Yaskewich said he would not put undue weight on monthly figures, especially at the county level.

"When you look at county data, there can be a lot of variation month to month (because) the smaller population size and smaller sample sizes are used in estimates," he said.

Soft landing?

"We've seen inflation go down with very minimal impact on the labor market, which creates the narrative of a 'soft landing' for the economy," said Yaskewich, noting "soft landing" refers to reducing inflation without a significantly large rise in unemployment.

Other economists use the phrase "soft landing" to refer to an absence of an economic recession.

"I think the likelihood of a soft landing is looking better than it was because of the progress already made in reducing inflation, the pace of job growth and the unemployment numbers we're seeing. We're not out of the woods yet, though," Yaskewich added.

Gilligan spoke of balance when it comes to the economy.

"You're trying to get closer to balance but you don't want to push on the pendulum too hard and get a reaction from the economy you don't want. You always hear the goal is to create a soft landing for inflation to level things out. It's a little like laboratory titration, going drop by drop, little bit by little bit. This is just a longer process than normal," he said.

Statistics

Total nonfarm payroll employment increased by 187,000 in August, according to U.S. Bureau of Labor Statistics. Employment continues to trend up in health care, leisure and hospitality, social assistance and construction, while employment in transportation and warehousing declined, BLS reported.