Effects of Mother Nature Apparent with Alabama Unemployment Rate Increase

June 23, 2011

According to a recent press release issued by the Alabama Department of Industrial Relations last week, the May 2011 unemployment rates were up 0.3% from April 2011, going from 9.3% to 9.6%.  This rate represents 206,809 unemployed persons, which is slightly higher than the May 2010 unemployment rate of 9.5%.

According to the Alabama Department of Industrial Relations Director, Tom Surtees, there are several factors that contributed to the increase.

One major factor includes the devastating tornados that hit the State of Alabama back on April 27th.  According to the a recently published study by the Alabama Center for Business and Economic Research it was estimated that the tornados would cause a reduction in the unemployment rate initially by an 0.5%. The effects of the tornadoes on the job market were not reflected in April’s numbers because of the way the unemployment rate is calculated.

According to Surtees, “While we are disappointed to report an increase of three-tenths of a point in our unemployment rate, we have to keep the big picture in mind.  We knew that the devastating storms we suffered in April were going to have an impact on unemployment. This is something that we could not have foreseen. I’m not going to go so far as to say that the entire increase can be attributed to the storms, but they’re certainly a major factor.”

Another driving factor is that May has historically been a month of increased influx of people in the labor force due to college graduates now seeking employment and this past May, in particular, some positive economic indictors have also caused some people previously having given up on their job search to re-enter the job market.

The good news is that despite the unfortunate effect that the devastating storms have caused on Alabama’s unemployment rate, the Alabama Center for Business and Economic Research’s study also estimated that the recovery efforts would create some 51,700 jobs in the short-term.

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