August unemployment rate drops steeply to 4.8 as Labor Force falls

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August unemployment rate drops steeply to 4.8 as Labor Force falls

Fri, 09/18/2020 - 10:33am -- tim

by Timothy McQuiston, Vermont Business Magazine Today, the Vermont Department of Labor announced that the state's unemployment rate fell dramatically in August to a seasonally-adjusted rate of 4.8 percent. This reflects a decrease of three and five-tenths percentage points from the prior month’s revised estimate of 8.3 percent. Vermont's jobless rate is tied for fourth lowest in the nation. The decline was fueled largely by a Labor Force decline of nearly 15,000 workers from the July report and a steep decline in the number of unemployed of almost 13,000. The number of employed also fell by about 2,000.

Labor Commissioner Michael Harrington acknowledged that these numbers do not reflect the reality of the workforce: “The August report shows employment in the hardest-hit industries such as Leisure and Hospitality is rising but still below pre-pandemic levels. Meanwhile, data based on the US Census’ monthly household survey estimates that nearly 15,000 Vermonters exited the labor force in August. 

"To be considered part of the statistical labor force, survey respondents must be actively looking for work and willing to accept work if offered; however, the daily impacts of this emergency, from childcare and remote education, to concerns about workplace and personal safety, make the search for work much more challenging.

"Knowing that the actual number of Vermonters filing weekly for unemployment benefits remains much higher than the survey data, and that traditional work search requirements have been suspended, we know that the results of the household survey do not accurately reflect Vermont's economic reality.  What is clear, is that the traditional definitions used to calculate unemployment rates or categorize displaced workers under normal circumstances, do not align with the crisis environment we’re in today.”

Harrington said the raw numbers are not wrong but for the first time there are more people receiving benefits than are listed as unemployed.

As for why there was such a dramatic decrease in August in the Labor Force and unemployment rate, Mathew Barewicz, E & LMI Director, said the modeling takes a long time to catch up with the reality. He described it as "turning a boat," in that it doesn't happen quickly.

He also said that while the unemployment rate typically reflects how well the economy is doing, such is not really the case now as the modeling has not caught back up.

Governor Scott said there are no plans yet to institute a work-search requirement for benefits. There have been concerns from employers that people aren't going back to work, and therefore filling available jobs, because people continue to get benefits.

Scott said, however, that people are going back to work and the economy continues to open up.

Today the governor announced that restaurants and bars can re-open counter service, with social distancing requirements and plexiglass barriers.

Scott also is allowing lodging facilities to open back up to 100 percent capacity.

The seasonally-adjusted Vermont data for August show the Vermont civilian labor force decreased by 14,812 from the prior month’s revised estimate. The number of employed persons decreased by 2,068 and the number of unemployed persons decreased by 12,744. The changes to the labor force, the number of unemployed persons and the unemployment rate were statistically significant in the seasonally-adjusted series.
The comparable United States rate in August was 8.4 percent, a decrease of one and eight-tenths percentage points from the revised July estimate. 

The August unemployment rates for Vermont’s 17 labor market areas ranged from 3.3 percent in Newbury to 7.0 percent in Woodstock (note: local labor market area unemployment rates are not seasonally-adjusted). For comparison, the August unadjusted unemployment rate for Vermont was 4.6 percent, which was a decrease of three and six-tenths percentage points from the revised unadjusted July level and an increase of two and three-tenths percentage points from a year ago.

Not-Seasonally Adjusted

The preliminary ‘not-seasonally-adjusted’ jobs estimates for August show an increase of 4,900 jobs when compared to the revised July numbers. There was a decrease of 400 jobs between the preliminary and the revised July estimates due to the inclusion of more data. The broader economic picture can be seen by focusing on the over-the-year changes in this data series. As detailed in the preliminary ‘not-seasonally-adjusted’ August data, Total Private industries have decreased by 33,200 jobs (-12.7 percent) and Government (including public education) employment has decreased by 700 jobs (-1.3 percent) in the past year.


The seasonally-adjusted data for August reports an increase of 3,700 jobs from the revised July data. As with the ‘not-seasonally-adjusted’ data, this over-the-month change is from the revised July numbers which experienced a decrease of 400 jobs from the preliminary estimates. The seasonally-adjusted over-the-month changes in August varied at the sector level. Those with a notable increase include: Federal Government (+800 jobs or +11.0%), Other Services (+400 jobs or +4.4%), and Leisure & Hospitality (+800 jobs or +3.9%). Sectors with a notable decrease include: Financial Activities (-200 jobs or -1.8%) and State Government (-200 jobs or -1.0%).

Unemployment Rates for States, Seasonally Adjusted
State August 2020(P)


4.0 1


4.1 2


4.2 3

South Dakota

4.8 4


4.8 4

North Dakota

5.0 6


5.6 7


5.6 7


5.6 7


5.7 10


5.9 11


6.0 12


6.1 13


6.2 14

South Carolina

6.3 15


6.4 16

New Hampshire

6.5 17

North Carolina

6.5 17


6.6 19


6.7 20


6.8 21


6.9 22


6.9 22


6.9 22


7.0 25


7.4 26


7.4 26


7.4 26


7.4 26


7.6 30


7.6 30


7.7 32


7.9 33


8.1 34

District of Columbia

8.5 35


8.5 35


8.5 35


8.7 38


8.9 39


8.9 39

West Virginia

8.9 39


10.3 42

New Jersey

10.9 43


11.0 44


11.3 45

New Mexico

11.3 45


11.4 47


12.5 48

New York

12.5 48

Rhode Island

12.8 50


13.2 51

(p) Preliminary

Note: Rates shown are a percentage of the labor force. Data refer to place of residence. Estimates for the current month are subject to revision the following month.

Source: VDOL. 18 SEPTEMBER 2020. The Unemployment and Jobs Report for August is scheduled to be released on Tuesday, October 20, 2020 at 10:00 a.m. Read full report at