Lincoln's July unemployment rate dropped below 2% for the first time since at least 1990, while the state's rate hit its lowest level in more than 20 years.
The 1.9% unemployment rate in the Lincoln Metropolitan Statistical Area last month is the lowest recorded in data going back to 1990. The rate hit 2% several months in 1997 and 1998 but never dropped below that level.
The last time the state's unemployment rate was as low as the 2.3% recorded last month was in November 1998. The last time it was lower was April of that same year. Nebraska continued to have the lowest rate in the country in July.
"Nebraskans are tough, hard-working people, and they are powering Nebraska’s current economic boom," Gov. Pete Ricketts said in a news release.
Low unemployment typically is a good thing for the local and state economy. But employers are having trouble filling jobs, and some businesses, particularly restaurants, are cutting back on hours and days of operation because of a lack of staff.
"While the unemployment rate has reached a historical low and the number of filled jobs is up significantly over July of 2020, many employers continue to seek qualified talent,” Commissioner of Labor John H. Albin said in the release.
Lincoln's data, which is not seasonally adjusted, shows the workforce was actually bigger in July than it was a year ago by about 700 people. There were 6,275 more people employed than in July 2020 and 5,572 fewer unemployed. The number of jobs grew by 8,251. However, the July labor force was still smaller than it was in July 2019.
Statewide, the labor force continues to be smaller than it was a year ago, which is likely a function of people who dropped out during the pandemic and have not yet come back. The state as a whole had nearly 7,500 fewer workers than a year ago, with 13,605 more employed and 21,062 fewer people unemployed. The number of jobs in the state grew by 35,918.
Eric Thompson, director of the Bureau of Business Research at the University of Nebraska-Lincoln, said that while the low unemployment rates are good news for workers, they "reinforce that this is a challenging time for state and local businesses seeking to expand their workforce."
"Businesses are especially challenged because labor force participation has not yet recovered to pre-pandemic levels in Nebraska," he said. "Growing the workforce is a key challenge for the Nebraska economy going forward."
Politicians, business owners and others have cited ongoing federal stimulus as the reason behind the labor shortage, but Creighton University economist Ernie Goss said it's only one of several factors.
"Federal stimulus payments, which incentivize not working, account for a portion of the shortage," Goss said. "Other factors include the lack of child care and fear of the coronavirus in the workplace."
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