Vermont’s unemployment rate continued its decline for the fifth consecutive month in February, according to the Vermont Department of Labor, even as the federal unemployment rate went up.
Vermont’s 3.7 percent unemployment rate for February is .3 percent below the 4.0 percent rate reported for January.
As in January, the reported drop in unemployment is not due to a shrinking labor force, but an increase in jobs that exceeded the increasing size of the state’s work force.
The seasonally adjusted labor force estimate for February shows a total statewide workforce of 350,850, which represents an increase of 300 workers since January. That growing labor force was met with 1,300 new jobs.
A shrinking unemployment rate is often seen as a measure of sound economic health, but that isn’t always the case. If a labor force is shrinking due to discouraged unemployed workers who give up on finding a job or retiring workers, the unemployment rate may fall simply because the labor force is shrinking.
For two months in a row, Vermont has seen the labor force increase while the unemployment rate falls. Kevin Stapleton, the assistant chief of the Department of Labor’s Economic and Labor Information Division, said that is good news for Vermont’s economy.
“Seeing the labor force grow for a couple months in a row is a positive sign, and seeing the number of employed grow,” he said.
But with an aging workforce and a lack of young workers to replace retirees, Stapleton said “the labor force may get smaller in coming years just because of demographics.”
