Area jobless figure at 6-year high

The Charlottesville region’s unemployment rate has hit its highest point in at least six years, according to August figures released Tuesday.

Charlottesville’s Metropolitan Statistical Area — which includes the city, as well as the counties of Albemarle, Greene, Fluvanna and Nelson — had a jobless rate of 4.1 percent in August, up from 3.9 percent in July and 2.7 percent in August 2007.

There were 4,300 people unemployed in the Charlottesville area in August, marking a 55.6 percent increase over the previous August.

Not since the tail end of the last recession, in 2002, has the Charlottesville region seen such an elevated rate of unemployment.

“With these sluggish times that we’re having right now, not many new jobs are being created,” said William F. Mezger, chief economist with the Virginia Employment Commission. “People who have lost their job aren’t moving into new jobs very quickly. Over time, that is starting to add up.”

Though the Charlottesville area’s jobless rate is up, the region is still faring better than just about every other corner or Virginia, including Blacksburg, Danville, Harrisonburg, Lynchburg, Richmond, Roanoke, Hampton Roads and Winchester. Only Northern Virginia reported a lower unemployment rate in August.

“Things are up everywhere,” Mezger said. “Compared to most other places, Charlottesville isn’t doing that bad.”

Virginia’s statewide unemployment rate was 4.6 percent in August, up from 3.2 percent a year earlier.

Yet the Charlottesville region’s job growth is not exactly stacking up well against other parts of Virginia. Out of the state’s nine other metropolitan areas, only the Charlottesville region saw a decline in total employment. In August, 99,700 people were employed in non-farming jobs in the Charlottesville area. A year earlier, there were 99,800 people working in such jobs.

Buckingham County had the highest level of unemployment in Central Virginia in August, with a 5.4 percent jobless rate. Next highest was the city of Charlottesville with 5.2 percent and Orange County with 5 percent.

The Charlottesville region’s lackluster job market was brought about by the downturn in the real estate market, the national credit crunch, a decreased amount of discretionary spending and higher gas prices. In such an environment, some local companies are shedding jobs, while others are cautious about hiring new workers.

During the last two recessions, the Charlottesville area’s unemployment rate peaked roughly a year after the national economy started to rebound. If past economic downturns are any guide, the area’s rate of joblessness is likely to get worse before it gets better, said Michael Harvey, executive director of the Thomas Jefferson Partnership for Economic Development.

“If you’re looking at the history, it portends higher numbers to come,” he said. “That’s not what you’d call good news.”

During the economic downturn of the early 2000s, the Charlottesville area’s jobless rate rivaled its current level of slightly more than 4 percent. After the recession of the early 1990s, the local unemployment rate hit 6 percent.

Roughly five years ago, a jobless rate of 5 percent in Central Virginia was seen as a healthy level of employment, said Chris Engel, assistant director of Charlottesville’s office of economic development. While the jobless rate has ticked up a bit, he said, things are still pretty good.

“I don’t think it’s a reason to set off any alarm bells at this point,” Engel said.

Engel pointed out that there have not been any massive layoffs lately in the Charlottesville area. The latest figures, he said, are evidence that businesses are mostly hesitant to add extra workers.

“Folks are being cautious,” he said. “And given the times we’re in, you can’t blame ’em.”

Overall, the Charlottesville area has the 41st lowest unemployment rate out of the nation’s 369 metropolitan areas. Less than a year ago, the Charlottesville region was consistently ranked in the Top 10.

Not all predictions about the Charlottesville region’s economy are conservative. A Sept. 9 report by Manpower Inc. projected that area companies will hire at a “vigorous” pace during the final three months of 2008.

The report found that 60 percent of surveyed area employers planned to hire more employees in the fourth quarter of the year. Another 13 percent planned to maintain their current staffing levels, while 27 percent expected to make job cuts.

The region’s best job prospects, the report found, will be in the industries of construction, public administration, transportation/public utilities, finance/insurance/real estate, and education. The report said that the Charlottesville area’s job outlook is tied for the nation’s sixth most optimistic.