Cautious optimism as Merced County's unemployment rate drops

pguerra@modbee.comMay 20, 2013 

— More people are finding jobs these days, but there are still plenty of folks looking.

Merced's unemployment rate for April declined to 15.5 percent, according to numbers released Friday by the Employment Development Department.

That's down from a revised 17.2 percent the previous month and 18.0 percent in April 2012. Despite the improvement, Merced's rate for April remains well above state and national averages.

Nationally, the unemployment rate for April was 7.1 percent, with California seeing a rate of 8.5 percent.

To the north, Stanislaus County's unemployment rate also dropped, falling to 13.4 percent in April, down from a revised 14.5 percent in March. A year ago, it was 15.8 percent.

Drops year-over-year signal growth in the economy.

"Overall, they weren't huge numbers, but we did have some positive increases," said EDD labor market analyst Nati Martinez. "That is great to see."

Martinez pointed out that this year's rate was the lowest seen for April since 2008, the year the bottom dropped out of the economy and things everywhere went south in a hurry.

Gokce Soydemir, professor of business economics at California State University, Stanislaus, likened the situation to falling into a deep hole and then slowly climbing out.

"You're nowhere where you should be, but you're making progress," he said.

Manufacturing and construction showed improvement. Soydemir said that's evident in the building seen going on in the area after years of mostly hammers-down conditions.

"It wasn't visible before," he said. "But now, going out in the streets, if you drive by these new areas where houses are being built, there is a lot of activity there."

Soydemir said that figures also show fewer homeowners falling behind in their mortgages, indicating that consumers "feel better about their prospects."

But he cautioned that the effects of the federal government budget cuts that recently went into effect have yet to be seen.

"As that continues, most likely it's going to put a drag on the economic recovery," he said.

Nationally, 40 states reported lower unemployment rates, with increases in only three: Louisiana, Tennessee and North Dakota. Rates were unchanged in seven states.

California, New York and South Carolina all reported the largest unemployment rate declines in April. Each state's rate fell by 0.4 percentage points.

The report said 30 states added jobs in April, while 18 reported fewer jobs.

Nationwide, employers added 165,000 jobs in April and the unemployment rate fell to a four-year low of 7.5 percent. The economy has added an average of 208,000 jobs a month since November.

That's up from only 138,000 a month in the previous six months.

Overall, Soydemir said, there is cause for cautious optimism. Even government, which typically lags far behind the public sector in recovering, is showing some signs of life.

"For the first time since the recession, we started seeing improvement in all categories of employment," he said. "That's an important thing to note."

Breaking News Editor Patty Guerra can be reached at or (209) 578-2343.

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