Record Delaware unemployment pushed higher in May

WILMINGTON – Bucking the national trend of declines, Delaware’s May unemployment report set a new modern record as 15.8% of the labor force was out of work, officials reported.

The monthly report on the staggering percentage of unemployed workers came after 2,516 more workers reportedly filed for unemployment last week, pushing the total number of residents who have filed for assistance to 109,080, according to the Delaware Department of Labor. The number of continuous claimants has fallen to just over 56,000 though, with a week-to-week decline of more than 3,000 people.

Last week’s new filings are lowest weekly total since the COVID-19 pandemic began, while the continuous claims are at their lowest level since April, suggesting that many workers are beginning to return to work in some capacity.

But what is concerning is that Delaware may be lagging its peers in the recovery, as its seasonally adjusted unemployment rate rose more than 1 percentage point over April’s then-record-setting 14.7%. The national unemployment rate in May actually fell more than 1 percentage point to 13.3%, although some have questioned the accuracy of that figure due to classification errors.

It is Delaware’s highest recorded monthly unemployment rate, according to the U.S. Bureau of Labor Statistics (BLS), which started tracking state figures in 1976. Only estimates from the Great Depression are believed to be higher.

Delaware’s May rate was also the sixth worst unemployment rate of all states last month. Larger neighboring states all fared better to varying degrees, with New Jersey ranking one place higher with an unemployment rate of 15.2% and Maryland doing considerably better to rank tied for 15th best at 9.9%. Nebraska had the lowest unemployment rate at 5.2% while Nevada had the highest at 25.3%, 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 74,800 workers were unemployed. Tom Dougherty, chief labor market economist for the department, 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 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 nearly 110,000 workers have filed for unemployment assistance in the wake of the pandemic, most because of statewide business closures mandated by Gov. John 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 14.9%, 17% and 16%, 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 roughly one in five workers was unemployed for the second consecutive month.

Some good news coming out of the labor report was that Delaware added about 9,000 workers back to the labor force after losing more than 12,000 in the April report. Still, the state’s pool of workers has shrunk by more than 3% from its record high in February.

Delaware also saw an aggregate increase of about 4,400 jobs in May after losing a jaw-dropping 74,700 jobs in April.

The largest gains came from the leisure and hospitality sector, the education and health sector, and the professional and business services sectors, all of which were among the hardest hit in the state-mandated lockdown spurred by the pandemic. Each added at least 1,000 jobs.

Meanwhile, trade, transportation, and utilities also added 700 jobs while manufacturing and construction both added about 400.

The sectors that saw losses last month include state and local governments, which lost about 1,300 jobs, and financial services, which shaved 300 jobs.

By Jacob Owens

jowens@delawarebusinesstimes.com