Jobless rate on Long Island hit 3.6% in March as number of workers declined

Long Island’s unemployment rate increased to 3.6% in March, a significant uptick from the region’s jobless rate the same time last year, state data shows.  

In March of last year, the Island’s unemployment rate was 3.1%, according to figures released Tuesday by the state Labor Department. While increases are common and can even signal broader economic growth given certain factors, data for last month shows a slowdown in the labor market.

“This report showed that we had a year-over-year increase in the unemployment rate and March was the first month that our region’s labor force declined on a year-over-year basis since the pandemic,” said Shital Patel, labor market analyst with the state Labor Department’s Hicksville office.

The number of employed residents declined by 10,700 individuals last month from March 2023. At the same time, the number of unemployed residents — defined as those out of work but actively job hunting — increased by 8,200 to 55,100.

In total, the Island’s labor force — the combination of all employed and unemployed residents — was roughly 1.52 million last month, a decrease of 2,400 from the same month a year ago.

“Underlying details reveal that the labor market picture deteriorated somewhat compared to a year ago,” Patel said. “The shrinking labor force was driven by a decline in the number of employed Long Islanders, most of which moved into unemployment.”

Patel cautioned against alarm, adding that even with an uptick the region’s unemployment rate has been well below 4%, a benchmark economists consider to be full employment.

“The unemployment rate has been under 4% for over two years and has been consistently below both the state and national averages,” she said.

“While one month doesn’t necessarily indicate a trend, this report was in contrast with the relatively strong job growth in last week’s jobs report,” Patel said.

Ordinarily, a labor market that sees both declines in the labor force and numbers of employed while seeing increases in joblessness would be a net negative to the economy. But economist John A. Rizzo said results like these might signal the end of a long period of inflation.

“You would expect the unemployment rate to go up because of the interest rate hikes and desire to slow down the economy,” said Rizzo, a Stony Brook University professor. “It’s good news from the standpoint of slowing the economy slightly so the Fed will cut interest rates."

A slower economy has been the goal of the Federal Reserve, which has used interest rate hikes as a way to combat inflation. Reports like these, while not indicative of a national trend, are the kinds of conditions the Fed is hoping to see before lowering the cost of borrowing. 

“This might indirectly be a good thing because a slower economy is what the Fed is looking for,” he said. “Doesn’t mean the economy is in recession. But maybe inflation is going to go down a bit and the Fed will cut interest rates.”