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Galax unemployment among highest in state

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RICHMOND — Galax was one of the Virginia localities posting double-digit unemployment figures for December 2008, according to a report issued last week by the Virginia Employment Commission.

The city’s rate for that month was 10.9 percent — the sixth-highest in the state.

Unemployment rates for the counties also rose from November to December, putting Carroll at 9.6 percent and Grayson at 9.1 percent.

Virginia merchants reported the worst holiday sales since 1969 in December, the VEC reported.

Among Virginia’s 134 jurisdictions, Arlington County, with 3.2 percent unemployment, was the lowest.

Martinsville, with 15.4 percent unemployment, had the highest rate.

Joining Galax among localities with double-digit unemployment were Danville (13.9 percent), Williamsburg (12.5 percent), Page County (11.7 percent), Henry County (11.0 percent) and Patrick County (10.2 percent).

Virginia’s seasonally unadjusted unemployment rate rose 0.6 percentage point from 4.6 percent in November 2008 to 5.2 percent in December 2008. The number of unemployed workers rose from 190,800 in November to 213,400 in December, an increase of 22,600.

Nonagricultural employment in Virginia fell by 25,900 jobs from 3,792,300 in November to 3,766,400 in December.

Non-farm employment normally increases from November to December because of extra employment associated with the year-end holidays. But, the recession appeared to finally catch up with Virginia in December 2008.

This resulted from permanent employer closings and many more firms scheduling inventory adjustment layoffs the last weeks of the year. Furloughs in the five-week year-end holiday period this year involved 77 percent more workers than the previous year.

The statistical reference period in December 2008 — the week of December 7-13 — was late enough in the month to capture some of the year-end furloughs that started earlier than usual.

Merchants, caterers, hotels and shippers hired way fewer extra holiday workers this December because of sluggish business conditions. Normally in Virginia, about 25,000 extra workers are added for the holiday period. This year, it looks like only about 12,000 to 15,000 extra workers were hired. For the first time in 2008, non-farm employment in Virginia was negative in December when compared to the similar month of 2007.

Over the most recent 12 months, non-farm employment was down by 31,000 jobs, or 0.8 percent.

This December’s 5.2 percent Virginia unadjusted unemployment rate was the highest rate recorded in Virginia since a 5.3 percent jobless rate in January 1996. It was also well above the December 2007 Virginia unadjusted unemployment rate of 3.2 percent, but was still well below the December 2008 U.S. unadjusted unemployment rate of 7.1 percent.

The state’s civilian labor force, at 4.1 million for December 2008, was reduced by 5,800 individuals from November 2008.

Nine of Virginia’s 10 metropolitan areas saw increased unemployment from November to December 2008. Only the Danville metropolitan area saw a slight reduction in unemployment because of fewer temporary factory furloughs in the December 7-13 reference week, but Danville still had, by far, the highest metropolitan area jobless rate.

Northern Virginia, the largest area, still had the lowest metropolitan area jobless rate; but unemployment there was up from 3.5 percent in November to 3.9 percent in December. Permanent closings, more holiday furloughs and less extra work during the holidays caused the higher metropolitan area rates.

The number of Virginia residents drawing unemployment benefits in December 2008 was 68,000, up from 57,000 in November 2008 and 37,000 in December 2007. Initial claims for benefits averaged 12,000 per week this December, compared to 8,900 per week in November, and 6,900 per week in December 2007.

Nonagricultural wage and salary employment fell by 25,900 jobs from November to December. That period normally sees employment increases.

Manufacturing employment was down 1,900 to 269,800 as factories had more year-end inventory adjustment furloughs this year and those furloughs extended earlier into December than usual.

Virginia’s 211,200 factory production workers earned an average weekly wage of $790.76, which was $21.32 above the November average weekly wage, but was $18.13 less than in December 2007. The average length of the workweek rose 0.4 hours to 42.4 hours, but was 1.3 hours shorter than the previous December’s workweek.

There was some overtime this December to produce last-minute holiday merchandise, but not nearly as much as there was last year. The December average hourly factory pay rate of $18.65 was $.33 above November and $.14 higher than in December 2007.

It is expected that Virginia’s 2008 unemployment rate will average 4.1 percent, up from the 3.0 percent averages of both 2007 and 2006.