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Missouri sees major drop in July unemployment claims

JEFFERSON CITY - Missouri experienced a double-digit drop in unemployment in July according to a report issued by Missouri's Labor Department. 

According to the report, the number of new unemployment claims fell nearly 30 per cent in July 2006 compared to July 2005.

In July 2006, the state agency reported there were 29,086 claims for unemployment compensation.  A year earlier, there were 37,708 claims.

Labor Department spokesperson Tammy Cavenders attributed the decrease to the pro-business line towed by Republican Gov. Matt Blunt.

"The Quality Jobs Act, tort reform and workers compensation reform can all play factors in this," she said -- adding, "but there can be several different factors as well."

"One of the resasons for this is a good positive business climate," said Greg Ochoa, a spokesperson for the  Missouri  Economic Development Department. "I think Missouri's economy continues to be strong. Employers are discovering that Missouri has a strong work force."

"I'm not surprised the claims were down," said Bill Niblack, Research Manager for the Economic Development Department. "The unemployment rate is down, and they usually correspond."

The Missouri unemployment rate in July was 4.7 per cent, lower than the national rate of 4.8 per cent. But Niblack said he wasn't fooled by that one-tenth per cent.

"Unemployment in Missouri is fairly similar to the national average over the long-haul," said Niblack.

Niblack doesn't attribute the decrease in filed claims to policy or a positive business climate. He attributes it to chance.

"Our statistics are taken during one week every month. We call it the 'Reference Week,'" he said. The reference week for Missouri economists is the week of the 12th every month.

"Typically, we see a decrease in employment [and a raise in unemployment] in July due to auto model changeover layoffs."

Niblack explained th at during the changeover layoff periods, automakers close factories for two weeks to change car models. During these two weeks, factory employees often claim unemployment. Though these workers may only be technically unemployed for a few weeks, their claims boost the number of claims filed for the month.

"Last July, several automakers closed their plants during our reference week," Niblack said. "This year, none of the layoffs fell during the week."

Niblack admitted that he wasn't positive that this added to the drop in claims, but if his theory is right, Missouri may see a rise in claims for August.

"People may not be returning to work in August [after the layoffs], so there may be more unemployment claims."

Whatever the reason for the dramatic drop, Niblack said that the rates will balance out eventually.

"When you have a development that differs from yearly seasonal patterns, you'll see a major difference in one month," he said. "But the overall trend will remain the same."