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Local Unemployment Rate Moved Up In March To 11.7%
Number of jobless increased by 17,000 from previous month
By LUIS A. RAMOS
May 13, 2004
The Puerto Rico Department of Labor & Human Resources has announced that the number of unemployed increased from 149,000 in February to 166,000 in March, representing an unemployment rate of 11.7%.
Compared with March 2003, however, the latest unemployment figure was down by 0.4 percentage points. There were 3,000 fewer unemployed workers this March than in the same month last year.
The number of employed workers jumped 14,000 from February to March, for a total of approximately 1.25 million, meaning 22,000 more people were employed than in March 2003. The Labor Department said the latest figures are the highest for any March.
The number of nonagricultural workers this March totaled 998,800, up 400 from February. Compared with March 2003, however, the number of nonagricultural workers this March was lower by 200.
Most of the job gains in the nonagricultural sectors occurred in government (up 900 jobs), health & educational services (up 600), and construction (up 300). Job losses were seen in the areas of commercial & professional services (down 900 jobs), and commerce, transportation & utilities (down 600).
Just as on the U.S. mainland, modest overall improvement in Puerto Ricos economy hasnt translated into significant jobs growth. By all accounts, the local job market remains weak, with unemployment hovering around 12%.
According to Banco Populars "Economic Progress Bulletin," two key economic components, manufacturing and construction, have taken opposite routes. Manufacturing is still going at a slow pace, even though export volumes (mostly a manufacturing byproduct) are picking up. More productivity with no additional jobs created, however, is leaving things much as they have been in the local labor market.
The construction sector, on the other hand, has started to recover, as expected by most forecasters. Both private and public construction has taken off, with the number of private and public construction permits increasing by 54% and 26%, respectively, between January and March.
Companies in most other sectors, here and in the States, have continued to seek increased operational efficiency while limiting new hires.
BusinessWeek recently reported that the trouble may not be entirely a productivity issue. For one, the cost of capital became a bargain in relation to the cost of labor. Another item is the cost of new equipment, which went down 3% per year through the 90s and has continued to decline since the recession ended. The magazine additionally pointed to the ultra-low interest rates allowing cheap financing.
An additional consideration, said Federal Reserve Chairman Alan Greenspan at a recent conference, is the relationship between fiscal deficits and retirement benefits. Given that public deficits cant be corrected through the market, he argued, fiscal issues could become a long-term retirement obstacle. Retirement benefits started 30 years ago by the baby-boomer generation now weigh hard as a U.S. economic responsibility, he said.
March Employment in Puerto Rico (In Millions)
March Unemployment Rate in Puerto Rico
Source: Puerto Rico Department of Labor & Human Resources
This Caribbean Business article appears courtesy of Casiano Communications.