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    September 2016

Unemployment rate surges, but it's not time to worry yet

The most striking piece of data in this month’s newsletter is the surge in unemployment rate. Over a three-month period, the Kansas City metro’s unemployment rate climbed from 3.8 percent to 5.1 percent. Only one metro in our peer group, Sacramento, has a higher unemployment rate (5.8 percent).

Certainly, this trend is noteworthy but there is no reason to panic just yet. We’ll take a closer look at the reasons why in a moment. But first, let's focus on the employment chart. After three months of stagnation, employment finally showed some signs of life, climbing to 1,059,200 in July. This is up 12,100 jobs from one year earlier — still nothing to write home about, but the upward tick suggests that our employment expansion may still have legs.

Job postings also remains strong. There were nearly 22,000 unique job postings in the region in July. This marks a slight increase from June, but more importantly, it is a rebound from the sharp drop we saw between May and June.

Now, about that unemployment rate. It's often cited as a measure of the economy's performance. And, yes, a lower unemployment rate is generally preferred over a higher one, because a rising unemployment rate sometimes means the economy is losing jobs. That is not the case here.

Remember, the unemployment rate is simply the number of unemployed people (people without a job who are actively looking for one) divided by the labor force. The chart above shows that number of employed residents (in blue) is still increasing, albeit slower than we might like. The labor force (in orange) is also increasing, and at a faster rate than employment. This widening gap between employed and labor force leads to the higher unemployment rate.

We typically see a spike in labor force in the summer as recent graduates enter the workforce. In a growing economy, these new entrants eventually find work and the higher unemployment rates begin to subside.

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[The current number of jobs in the Kansas City metro as determined by the monthly Current Employment Statistics survey.]

Employment levels continue along an upward trend, with area employment now at 1,059,200.

Chart comparing employment totals to prior years

[The number of unemployed as a percent of the total labor force, not seasonally adjusted.]

The metro unemployment rate continued to climb. At 5.1 percent, it is higher than last year for the first time in 2016.

Chart comparing unemployment rate to prior years

The rising unemployment rate moved Kansas City nearly to the bottom relative to peers, ahead of only Sacramento.

Chart comparing peer metros

After dipping last month, job postings increased slightly, to 21,880.

Chart comparing job postings to prior years

Most recent Employment by Industry infographic

Employment by Industry Infographic
(Click to enlarge)

About RWIN

MARC developed the Regional Workforce Intelligence Network to encourage greater collaboration among the region's workforce data and information professionals.

RWIN is a collaboration of economic development professionals, one-stop centers, workforce centers, community colleges and universities that meets on a monthly basis.

For more information, visit

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Mid-America Regional Council | 600 Broadway, Suite 200 | Kansas City, MO 64105 | Ph. 816-474-4240 |
Data sources: Kansas Department of Labor, Missouri Economic Research and Information Center (MERIC), The Conference Board and EMSI.
Regional data includes Franklin, Johnson, Leavenworth, Linn, Miami and Wyandotte counties in Kansas and Bates, Caldwell, Cass, Clay, Clinton, Jackson,
Lafayette, Platte and Ray counties in Missouri.

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