Wichita area unemployment rate jumps to 5.7 percent in July

The Wichita area unemployment rate in July was a not-seasonally adjusted 5.7 percent, a pretty strong jump up from the 5.2 percent rate in June, according to the Kansas Department of Labor.

The increase in unemployment in July may or may not reflect a problem. The rate is not seasonally adjusted and July often records the highest unemployment rate of the year because of the arrival of students in the job market. A rate adjusted to account for the summer surge isn’t available, yet.

But a deeper dive into the July report has puzzled Jeremy Hill, director of the Center for Economic Development and Business Research at Wichita State University.

For three or four years, the Wichita economy moved in a slow, upward curve — until this winter. Something may be happening in the economy that’s not good.

Both the number of people working and the number of unemployed who want to work have been falling, according to the government’s monthly survey of area households. Seasonally adjusted numbers show that about 7,000 fewer people in the metro area are working now than a year ago, but they didn’t move into the ranks of the unemployed who are seeking work.

“When they’re laid off, they’re discouraged and leave the labor market completely,” he said. “That’s a very strange environment.”

Another possibility, he said, is that companies could be relocating employees to other cities.

One thing that is clear, he said, is that much of Kansas, especially western Kansas, is seeing job losses from the collapse in oil drilling and the shrinkage of farm incomes in the past year.

“The misery is being shared across the state,” Hill said.

Reach Dan Voorhis at 316-268-6577 or Follow him on Twitter: @danvoorhis.