August economic data suggest an improving Kodiak economy, but it will take more than one month of good news to recover from the COVID-19 pandemic’s shellacking.
Unemployment hovered above 10% for Kodiak in April, May and June. It dipped down to 8.3% in July but, in the latest release from the Department of Labor, it dropped all the way down to 4.4% in August. For the state as a whole, the rate fell from 11.6% to 7.4%.
State economists cautioned not to read too far into the vastly improved numbers. COVID-19 has caused havoc not only in the economy, but also with the process of gathering data about the economy itself.
Calculating unemployment rates relies on complex calculations using Bureau of Labor Statistics surveys, said Alaska Department of Labor economist Karinne Wiebold.
The pandemic has disrupted the way the bureau conducts surveys, making figures somewhat unreliable. Surveys have been difficult to carry out, and some people don’t know how to answer if, for example, they were not laid off but moved into part-time work.
But there are other ways to measure the health of the economy, such as total employment and unemployment insurance claims. Indicators were in sync until recently.
Wielbold said “everything was pointing in the same direction” in the months since March. It was all bad. Recently, unemployment dropped significantly, while other indicators, such as employment and unemployment claims, stayed mostly steady.
Given what they knew about the challenges of data collection and analysis, economists were skeptical that the rate had actually dropped so much. Total employment was down 4,400 jobs in the Gulf Coast Region between August 2019 and August 2020.
There’s still room for optimism on Kodiak, however. Total unemployment insurance claims have dropped this month too. May saw 896, June 852 and July 803. August had only 464.
“The claims numbers and unemployment rate for Kodiak do appear to be correlating much closer than the state as a whole,” Weller Lennon, another Department of Labor economist who specializes in unemployment insurance, said in an email.
That’s good news. But it’s only one month. And other areas in Alaska aren’t faring so well.
“It’s just as likely that the equivalent change is coincidental,” Lennon said about the numbers.