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Puerto Rico's Unemployment Rate Hits A 20-Year Low In January

Rate of 11.7% helped by lower workforce participation, down from 12.8% in Jan. 1999

by Jeffry Valentin-Mari, Ph.D.

February 24, 2000
Copyright © 2000 CARIBBEAN BUSINESS. All Rights Reserved.

Puerto Rico's unemployment rate continues to decline, dropping to 11.7% in January according the monthly report of the Department of Labor and Human Resources. The January jobless rate came down from a figure of 12.8% in January 1999. The number of unemployed people decreased by 23,000, or 10%, to 153,000.

Graph 1
Source: Puerto Rico Department of Labor and Human Resources

Despite a 1.1% drop in the jobless rate the number of employed persons also declined in January to 1,155,000. Still, total employment in January was the second highest registered for the month of January since the Labor Department started compiling the statistics in 1947.

The report supports analysts and economists who indicated that the fall in unemployment is mainly due to the increased number of persons deciding to leave the formal labor market.

The number of persons in the civilian labor force, as of January 2000 was 1,308,000. This represents a decrease of 20,000 persons with respect to January of 1999 (1,328,000).

The labor force participation rate--the proportion of the population age 16 and older currently working or seeking jobs--reflects a decreased from 47.7% in January 1999 to 46.4% in January 2000. During the last decade, the annual average participation rate was 46.6% for 1989-99.

Source: Puerto Rico Department of Labor and Human Resources

The number of discouraged workers totaled 1,511,000 in January. This represents an increased of 56,000 persons with respect to January 1999 (1,455,000). They are not counted as unemployed because they had not searched for employment in the 4 weeks preceding the household survey. These people were not currently looking for work specifically because they believe no jobs were available for them.

Employment by Industry

As of January 2000, four sectors of the economy employed about 82% of the total employed persons. Specifically, the service sector employed 27% of the total employed persons; public administration 21%; trade 21%; and manufacturing 14%.

In January 2000, large job gains in construction and trade were accompanied by a decline in other sectors.

In the goods-producing sector, construction employment rose by 5,000 persons with respect to January 1999 (78,000). Manufacturing employment declined by 3,000 persons with respect to January 1999 (156,000). Factory employment has been on a clear downward trend since fiscal year (FY) 1994-95, but job losses moderated during FY 1997-98 and FY 1998-99.

In the service-producing sector, employment in trade grew by 12,000 jobs in January 2000, at 245,000. Finance, insurance, and real estate services increased by 2,000 jobs, from 40,000 jobs in January 1999 to 42,000 jobs in January 2000.

The number of persons employed in transportation, communication, and public utilities declined form 66,000 in January 1999 to 56,000 in January 2000. Employment in public administration services also declined in January, from 252,000 jobs in January 1999 to 246,000 jobs in January 2000.

This Caribbean Business article appears courtesy of Casiano Communications.
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