Smyth jobless rate steadily increasing

By DAN KEGLEY/Staff

While the nation and world watch and wait for the effects of Wall Street’s recent financial crisis on ordinary people and their jobs, Smyth County’s unemployment rate has crept up by fractions of a percentage point every month since April.
The rate remains low, at 6.8 percent in August, relative to the 10.6 unemployment rate 12 years ago. But it’s considerably higher than May 2006’s historic low of 3.9 percent.
Since then the rate in Smyth County has fluctuated but since May has shown a consistently upward trend. In that month, the unemployment rate was 5.5 percent. In June it rose to 5.8, then 6.4 in July and 6.8 in August, the last month for which data is available at the Virginia Employment Commission.
Smyth’s experience is shared by many jurisdictions across the state and may be the start of a continuing trend, according to a state VEC official.
“That’s because of the sluggishness of the new economy,” said William Mezger, the Virginia Employment Commission’s chief economist. “We seem to be getting a lot of little layoffs from just about everywhere. Over time, it is [going to] increase.”
Mezger said that the jobless picture shows no signs of improving.
“It looks like the nation is going to be in recession by the fourth quarter and it will be going on into 2009,” he said.
Locally, unemployment held below 5 percent for most of 2007. January opened 2008 with a 6 percent unemployment rate attributed to seasonal construction layoffs, and March saw a rate of 6.1 percent and a drop in April to 5 percent.
Sally Morgan, director of planning, economic and community development for Smyth County, said Wednesday, “Our unemployment rate has been going up since April. We suspect that this is largely due to the continuing decline nationally in housing construction and the resulting effect on sales for our area manufacturers that produce home building products.”
Morgan said several employers laid off employees or reduced their workforce by attrition by not replacing retirees, for example.
Other employers in the county have not been adversely affected by the housing market, she said. 
Like many in Washington and in the market sector, Morgan is watching to see what comes locally of the financial crisis that is felt in markets around the world.
“Another big concern, of course, is what effect the current national financial situation will have on local employment,” she said.
While most of the state saw unemployment rise, the hard-hit Danville area was the only metropolitan area in the state to improve in unemployment in August. Danville city’s August unemployment rate was 9.8 percent with 1,976 out of work, compared to 10 percent in July with about 2,000 people jobless. In August last year, the rate was 6.5 percent and 1,254 people were unemployed.
Martinsville continued to wrestle with high unemployment in August and July with 12.1 percent reported both months. In August 2007, the rate was 8.9 percent with 529 people out of work.
Mezger said most of the Southside jurisdictions saw an increase in unemployment.
“Just everything is up over a year ago,” he said. “That’s true in the state. That’s because of the sluggishness of the new economy. We seem to be getting a lot of little layoffs from just about everywhere. Over time, it is (going to) increase.”
Mezger said that the jobless picture shows no signs of improving.
“It looks like the nation is going to be in recession by the fourth quarter and it will be going on into 2009,” he said.

Bernard Baker, Media General News Service, contributed.