Delaware unemployment rate drops in June

DOVER – The state’s unemployment rate showed marked improvement in June, dropping more than 3 percentage points to 12.5% from 15.9% in May, according to state officials.

The June monthly unemployment report released Friday morning by the Delaware Department of Labor showed that 20,600 people went back to work after Gov. John Carney began the state’s three-phase reopening plan amid the COVID-19 pandemic. That continues a positive trend after May saw more than 4,000 jobs added back following Delaware’s staggering loss of 74,700 in April.

Despite a healthy drop from the record-breaking rate of 15.9% in May, the June unemployment rate is still far higher than the pre-pandemic record of 9.8% in November and December 1976. It comes as thousands continue to file for unemployment assistance in Delaware as well, with 3,167 filing last week. The number of continuous claimants has fallen to just under 50,000 though — the lowest level since mid-April.

Despite having a less drastic surge of viral cases than in states in the South and Southwest, Delaware is still lagging its peers in recovery. Its 12.5% June unemployment rate is higher than the 11.1% national average and ranks 10th worst among all states, according to the U.S. Bureau of Labor Statistics (BLS).

Delaware’s trend tracked toward its larger northern neighbors, with New Jersey ranking second worst with an unemployment rate of 16.6% and Pennsylvania ranking ninth at 13%. Maryland is doing considerably better, ranked tied for 16th best at 8%.

Kentucky had the lowest unemployment rate at 4.3% while Massachusetts had the highest at 17.4%, according to BLS.

The Delaware Department of Labor’s report, which is taken monthly during the calendar week that contains the 12th day, showed that 61,000 workers were unemployed. Tom Dougherty, chief labor market economist for the department, previously explained that the monthly unemployment figure is created from looking at continuous unemployment insurance claims as well as a BLS survey of residents on their employment status.

The official monthly unemployment statistic tracks not only those receiving benefits, but also those who are ineligible, such as terminated employees, those who have resigned, and the self-employed, who only became eligible for assistance under a special federal program established under the CARES Act.

While more than 120,000 workers have filed for unemployment assistance in the wake of the pandemic, most because of statewide business closures mandated by Carney to stem the spread of the virus, the state also had 19,400 unemployed workers in January, before the pandemic struck the U.S.

Dougherty said it’s important to remember that the monthly report is just a “snapshot” of one week in time.

The state’s three counties saw similar rates of unemployment with New Castle, Kent and Sussex counties reporting rates of 12.8%, 14.1% and 11.5%, respectively – although those statistics aren’t seasonally adjusted. Wilmington and Dover, the state’s two most populous cities, have seen an even greater impact in job losses, where about 18.5% of workers were unemployed, dropping slightly from May.

Continuing some good news in June was that Delaware added 15,200 workers back to the labor force after adding 9,000 in May. It was the first month amid the pandemic that the labor force was larger than its previous year’s monthly total and sits less than 1% off Delaware’s record high set in February.

The more than 20,000 employees who went back to work were welcome news for industries that had been awaiting the ability to reopen their doors.

The largest monthly gain came from the leisure and hospitality sector, which includes restaurants, hotels and entertainment venues that were battered by the months-long closures. It added 10,900 jobs back as restaurants were allowed to reopen dine-in service and hotels began to host visitors again.

The next largest gain came from retail, where in-store shopping was more widely available under Phase 1 and 2 of the reopening plan. It added 4,100 jobs.

The education and health sector, which began allowing more elective procedures and routine visits, added back 1,500 jobs.

The only sector that saw negative job growth was the financial activities sector, which shaved off 200 jobs in June after cutting 300 in May. The local government subsector also cut 300 jobs, but 500 new jobs at state and federal government drove hiring in the overall governmental sector higher in June.

By Jacob Owens

jowens@delawarebusinesstimes.com