Unemployment rises in New Albany, Jeffersonville

By MATT KOESTERS, Evening News
Matt.Koesters@newsandtribune.com

Unemployment in Jeffersonville and New Albany jumped more than 1 percentage point between December and January, and unemployment rates in both cities almost doubled from January 2008, according to a Department of Labor Bureau of Labor Statistics report.

New Albany's unemployment rate in January was 9.6 percent, versus 5 percent in January 2008. Jeffersonville's unemployment rate rose to 8.4 percent, up from 4.8 percent in January 2008.

The nationwide unemployment rate reached 8.5 percent in January.

"It was shocking to me," said Uric Dufrene, Sanders chair of Business at Indiana University Southeast in New Albany. "I did not anticipate it going that high this early in the year."

Perhaps more shocking was the one-month changes from December to January. Unemployment stood at 7.6 percent in New Albany and 7 percent in Jeffersonville in December, according to the report.

More than half of the job losses came from the manufacturing sector, and the heaviest job losses occurred in the last quarter of 2008, Dufrene said.

"I was expecting more than 8 percent, but going from 7.6 to 9.4 percent [in New Albany] is pretty shocking," Dufrene said. "Of course, this has implications for other sectors such as retail, hospitality and real estate."

While news of the bad economy might have influenced employment decisions, Dufrene said he believes employers made choices based on their own enterprise.

"I think certainly they're going to pay attention to economic trends and data, but these decisions are largely firm-specific," Dufrene said. "Employers don't want to lay people off. They're going to try to hold on to employees as long as possible because once you have an employee on the payroll, it's costly to sever the relationship."

Other costs of layoffs include rehiring and training staff once the economy does recover, Dufrene said.

He described unemployment as a lagging indicator, and said unemployment could continue to increase, despite indications that national economic conditions may be starting to recover.

"Job losses will occur throughout a recession," Dufrene said. "But even though the economy may be turning around ... you have some businesses that may continue to lay off."

Dufrene said the retail sector had been resilient relative to other industries until recently, but the latest numbers show larger retail declines.