News Columns & Blogs

Has the unemployment rate peaked?

WICHITA — I was shocked when I saw the July unemployment numbers for Wichita. It was 9.9 percent for the metro area, 10.2 for Sedgwick County and 11 percent for Wichita city. That’s up 1.4 percentage points from June.

Will it go down? Very likely, but it doesn’t mean the economy is improving. Unemployment rates are calculated two ways: seasonally adjusted means statisticians have taken out the regular yearly ups and downs to look at the underlying trend; and not-seasonally adjusted, which is the actual rate. Kansas had a 7.4 percent seasonally adjusted rate in July and a 7.7 not-seasonally adjusted rate. The U.S. rate (9.4 percent) is always seasonally adjusted.

The state figures the Wichita rate as not-seasonally adjusted, which means July is almost always the highest rate of the year because some workers are regularly laid off in July and rehired in August and September. Just because the rate may go down in September, doesn’t mean the city’s economy is creating new jobs again.

And, Wichita has a history of taking more than a year to hit bottom as the downturn ripples through the service economy. That may mean that unemployment rate in July 2010 will be over 9.9 percent.