The Sumter unemployment rate ticked upward during the last month of 2016, as some workers returned to the local labor force seeking jobs.
According to the South Carolina Department of Employment and Workforce, Sumter’s unemployment rate climbed to 5.0 percent in December, up from 4.9 percent the previous month. This modest increase occurred despite the DEW reporting the Sumter economy growing by about 190 jobs during the past month.
The percentage of unemployed, however, grew because the area’s labor force grew by about 230 people, meaning there were about 40 more people unemployed but looking for work in December than there were in November.
This climbing unemployment rate, however, could actually be a good indication for the Sumter economy, which has consistently had one of the highest unemployment rates of any of the metropolitan areas in the southeast during the past year, despite declining itself by about 1.3 percentage points during the past year.
As we stated in a previous post, when analyzing the figures behind the unemployment rate, there are times when a declining figure can actually be bad for a local economy, while there are also times an increasing unemployment rate can actually be a positive indicator.
The U.S. Department of Labor Bureau of Labor Statistics (BLS) calculates an area’s unemployment rate using surveys that measure the number of people working in an area, comparing that to the number of people in the labor force – those people able and willing to work, and either employed or actively seeking jobs.
Simply put, a falling unemployment rate is good when it occurs because people are gaining jobs, but bad when the rate declines because frustrated potential workers simply leave the labor force, unable to find work. This is what had been happening in Sumter during much of 2016.
At the same time, a growing unemployment rate can actually be a good economic indicator if it means potential workers are reentering the labor force because they are optimistic about finding employment. December appears to have been one of these times for optimism for Sumter, as the number of people in the labor force grew by the largest increase the area has seen since March 2016.
Unfortunately, starting with last March, Sumter’s labor force begin a steady decline, losing more than 1,700 workers. Because of this, December’s one-month uptick only raises the labor force levels back to where they stood in December 2015, and still nowhere nearly as large as they were in Sumter’s peak back in 1999 when, according to BLS, more than 48,000 Sumterites were either working or available to work.
It should be noted the December figures are preliminary, and an upcoming adjustment will help to further determine the Sumter employment picture. At the end of each year, the Bureau of Labor Statistics revises employment figures for the past year, so any gains, or declines, could be washed out by the updated data.
For now, however, it appears that the slight increase in the unemployment rate in December could actually be a good indicator of things to come for the Sumter economy.