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Unemployment falls to record low level in Alabama

By Phillip Rawls
Associated Press Writer

MONTGOMERY — Alabama’s unemployment rate for October fell to a record low of 3.1 percent, a figure economists said reflects a strong two-year run for the state’s business environment.

Economists are cautious about getting excited about one month’s unemployment rate, but they said the October rate is important because it’s part of a trend.

“The state’s economy has been doing real good. It’s been growing faster than the U.S. economy,” said Ahmad Ijaz, an economist at The University of Alabama.

Alabama has used the same method to measure unemployment since 1976, and the October rate broke the previous state record of 3.3 percent that was recorded in January, February and April of this year, said Ron Macksoud, spokesman for the state Department of Industrial Relations.

Below national rate

The October rate was down from 3.7 percent recorded in September and from 3.6 percent measured in October 2006. Alabama’s rate was well below the national rate of 4.7 percent.

Macksoud said Alabama’s lower unemployment rate resulted, in part, from fewer teen-gers 16 to 19 being in the job market and from 2,700 additional jobs in state and local education.

Economists consider an unemployment rate below 4 percent an indication of a good economy.

Karen Ransom, regional economist for the U.S. Bureau of Labor Statistics, said Alabama’s rate ran above 4 percent through 2003 and until the fall of 2004, when it began to fall. It occasionally went back up, but Alabama has not had a month with unemployment of 4 percent or higher since September 2005, when Hurricane Katrina impacted the economy.

“That’s a good trend,” Ransom said.

Gov. Bob Riley, who took office during an economic downturn in 2003, viewed the record low as the culmination of recruiting new industries and helping existing businesses expand.

“This shows our economy is resilient,” Riley said in a news release.

Keeping it down

Riley said Alabama faces challenges keeping the unemployment rate at record low levels because of high oil prices and uncertainty in the housing market.

Ijaz, who works at the Center for Business and Economic Research, said the state may see the rate “edge up a little” in coming months.

Riley said he will try to keep the economic growth continuing by asking the Legislature in February to again consider the personal and business tax breaks that he proposed but was unable to get passed in the spring legislative session.

Riley said he will again seek tax breaks for businesses that create jobs in some rural counties and for small businesses that provide health insurance to their employees.

He said he will also seek
income tax cuts for families making less than $100,000 per year.

Unemployment figures are not yet available for all states for October, but Macksoud said preliminary figures indicate Alabama will be in the 10 lowest states.

Alabama’s record low of 3.1 percent won’t become official for a few months.

Macksoud said it could get revised when more detailed economic information becomes available in the new year.

That happened a year ago when state officials announced Alabama had reached an all-time record low of 3.2 percent for October and November 2006. When additional information became available in 2007, the September and October figures got increased to 3.6 percent.

For October, the Department of Industrial Relations said Shelby County had the lowest unemployment at 2.0 percent, followed by Madison and Baldwin counties at 2.3 percent. Bullock County had the highest rate at 8.1 percent, followed by Wilcox at 7.5 percent and Dallas at 6.6 percent.

While the three West Alabama counties are leading the state, Ijaz said they have benefited from the state’s economic growth because they used to have unemployment rates in double digits.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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