At Reinhard-Madison Approach Staffing Inc. in White Plains, Allison Madison saw it coming in the fourth quarter last year. That”™s when her business providing temporary employees to a wide range of companies in Westchester County took a sudden dive.
“Historically, the staffing industry has been the proverbial ”˜canary in the coal mine”™ of economic predictors,” the company president said. “The staffing industry historically has always shown a decline before a recession ”“ or a contraction, if you don”™t want to use the r-word.”
Companies use temporary workers to adjust to work flows during their busy seasons. “If they don”™t feel that uptick, they”™re not going to hire,” Madison said. Her company”™s services typically are in demand during the fourth-quarter holiday season.
“This past fourth quarter, we started having our typical upswing ”“ and then someone just kind of pulled the plug on it, and it just stopped,” she said.
In contrast to a “really great” first quarter a year ago, this first quarter has continued that end-of-year employment decline. “Currently it”™s almost every single sector” served by her company, Madison said. Last year”™s hit to the real estate sector and mortgage companies caught in the subprime mortgage market collapse “is starting to really have a domino effect. The only areas that don”™t seem significantly affected are health care, education and exporters.” Exporters are seeing continued demand for their goods because of the weak dollar in the international currency market, she said.
In January and February, business clients were taking a “wait-and-see” approach. Now, “Except for those eternal optimists, I think the vast majority feel that we”™re already in a recession,” Madison said.
Her industry”™s canary-in-the-coal-mine status could be borne out by a recent U.S. Bureau of Labor Statistics report on mass layoffs nationwide. In January, the number left unemployed by those layoff events, which involve at least 50 persons from a single employer, increased for the fifth consecutive month. The temporary help services industry led all industries in initial unemployment claims stemming from mass layoffs, with 12,509 claims filed in January, followed by school and employee bus transportation, automobile manufacturing and professional employer organization employees.
Compared to January 2007, the number of initial claimants in mass layoffs increased in all four regions of the country in January, with the largest increase in the Northeast. New York, with nearly 8,000 new unemployment claims from January mass layoffs, was among 23 states reporting increases in those claims compared to January 2007.
Despite the sharp drop in temporary hiring seen by Madison, unemployment in Westchester County was lower than the state and national unemployment rates again in January, though higher within the county than in the previous month, according to the state Department of Labor.
The county”™s unemployment rate was 4.4 percent in January, up from 3.7 percent in December and 4.1 percent in January 2007. Statewide unemployment was 5.6 percent in January, compared with 4.7 percent in December and 5 percent in January 2007. The state”™s January unemployment rate was slightly higher than the national rate of 5.4 percent.
Putnam County, too, showed an unemployment increase this winter, from 3.3 percent in December to 4 percent in January. Unemployment in Rockland County rose from 3.8 percent in December to 4.3 percent in January.
In the Hudson Valley region, Kingston”™s unemployment rate rose from 4.6 percent in December to 5.4 percent in January. Dutchess County reported an unemployment increase from 4 percent in December to 4.8 percent in January. Orange County saw its unemployment rate rise from 4.2 percent in December to 5 percent in January.
While the r-word has dominated economic talk this winter, the state Labor Department in another recent report said the state”™s economic expansion continued in 2007.
From the beginning of the state’s current economic expansion in July 2003 through December 2007, the economy added 364,200 private-sector jobs on a seasonally adjusted basis, a 5.3-percent growth rate. That fell short of the nation’s private-sector job growth rate for the same period, which was 7 percent.
In 2007, New York’s private-sector job count increased 1.4 percent, marking the state’s fourth consecutive year of job growth and its strongest year since 2000. Private-sector jobs in the nation moved up 1.1 percent between 2006 and 2007.
Private-sector employment in the state rose most rapidly in New York City, with a 2.4 percent increase. Among metropolitan areas, the Putnam-Rockland-Westchester region ranked third with a 1.7 percent increase in job growth. The job count declined .5 percent in the Poughkeepsie-Newburgh-Middletown area and dropped .2 percent in the Kingston area.
Among the state”™s 10 labor market regions, the Hudson Valley region ranked second in both total job growth from 2003 to 2006, with a 2.7 percent increase, and in private-sector job growth, with a 3.1 percent increase. The regional labor market includes Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester counties.
The state’s unemployment rate dropped to 4.5 percent in 2007, its lowest annual rate since 2000. It was the state’s fourth consecutive year-over-year drop in the annual average unemployment rate.
Norman Steele, a research analyst chief in the Labor Department”™s research and statistics division, tempered the state”™s positive economic report by pointing out more recent trends. “However, the data also show that the economy began to decelerate during 2007, as over-the-year job growth slowed and the unemployment rate trended upward between the first and fourth quarters of the year,” he said.
