Unemployment rate falls to 3% on LI as more residents leave the labor force
A help wanted sign at Pat’s Service Center in Sayville. Long Island’s unemployment is down 0.4 percentage points from a year ago. Credit: Newsday/Steve Pfost
Long Island’s unemployment rate fell in November compared to the same month last year, newly released data show.
The Island’s unemployment rate dropped to 3% last month, down from 3.4% in November 2023, according to state Labor Department data published Monday. On a month-to-month basis, the rate was unchanged from October.
At the county level, Nassau’s jobless rate decreased to 2.9% last month from 3.3% a year ago. In Suffolk, the rate fell to 3.1%, down from 3.6% in November 2023.
Declining unemployment rates often signal a strong economy, as more residents secure jobs, reducing the number of jobless.
However, last month’s figures show that the number of employed residents, the number of unemployed residents and the total labor force all fell.
“Essentially, the numbers look quite similar to what we saw” in October, said Shital Patel, labor market analyst with the Labor Department’s Hicksville office. “We saw a fairly sizable decrease on a year-over-year basis of the labor force."
The labor force — the sum of all employed Long Islanders and those out of work but actively seeking employment — shrank to 1.52 million in November, down from 1.55 million in September 2023.
Patel said most of the decrease in November was due to Long Islanders – more than 22,000 – leaving the employed category and exiting the labor force altogether.
However, Patel said that without demographic data, it’s unclear what types of workers left the labor force or their reasons.
“We don’t have the demographics details to know exactly what’s going on,” she said. “It’s really hard to say who is exiting.”
But she has a few hunches. Given the Island's older-than-average workforce and the region's high cost of living, Patel theorized that the decline in the labor force could partly reflect older residents retiring.
“During the pandemic, a lot of older people across the country left the labor market for a variety of reasons, but we didn’t see that as much on Long Island,” Patel said. “Perhaps some of [the decline] represents the older population leaving the labor force as they reach retirement age today."
Economist John A. Rizzo, a Stony Brook University professor, said that while the unemployment rate remains low, November's decrease is more a trick of math than a reflection of a booming job market.
“I think this is an example where the unemployment rate can be misleading,” Rizzo said.
Rizzo suggested the decline might be due to a "cooling effect" stemming from the U.S. Federal Reserve Bank's earlier efforts to tackle inflation through interest rate hikes. Although the last of those hikes occurred last year, Rizzo said national policy impacts can take a long time to filter through local economies like Long Island's.
“Elevated interest rates slow down borrowing by consumers, it slows down mortgages, and it slows down businesses because the cost of investment goes up,” he said. “When that happens, you can expect employment to go down.”
Long Island’s unemployment rate fell in November compared to the same month last year, newly released data show.
The Island’s unemployment rate dropped to 3% last month, down from 3.4% in November 2023, according to state Labor Department data published Monday. On a month-to-month basis, the rate was unchanged from October.
At the county level, Nassau’s jobless rate decreased to 2.9% last month from 3.3% a year ago. In Suffolk, the rate fell to 3.1%, down from 3.6% in November 2023.
Declining unemployment rates often signal a strong economy, as more residents secure jobs, reducing the number of jobless.
However, last month’s figures show that the number of employed residents, the number of unemployed residents and the total labor force all fell.
“Essentially, the numbers look quite similar to what we saw” in October, said Shital Patel, labor market analyst with the Labor Department’s Hicksville office. “We saw a fairly sizable decrease on a year-over-year basis of the labor force."
The labor force — the sum of all employed Long Islanders and those out of work but actively seeking employment — shrank to 1.52 million in November, down from 1.55 million in September 2023.
Patel said most of the decrease in November was due to Long Islanders – more than 22,000 – leaving the employed category and exiting the labor force altogether.
However, Patel said that without demographic data, it’s unclear what types of workers left the labor force or their reasons.
“We don’t have the demographics details to know exactly what’s going on,” she said. “It’s really hard to say who is exiting.”
But she has a few hunches. Given the Island's older-than-average workforce and the region's high cost of living, Patel theorized that the decline in the labor force could partly reflect older residents retiring.
“During the pandemic, a lot of older people across the country left the labor market for a variety of reasons, but we didn’t see that as much on Long Island,” Patel said. “Perhaps some of [the decline] represents the older population leaving the labor force as they reach retirement age today."
Economist John A. Rizzo, a Stony Brook University professor, said that while the unemployment rate remains low, November's decrease is more a trick of math than a reflection of a booming job market.
“I think this is an example where the unemployment rate can be misleading,” Rizzo said.
Rizzo suggested the decline might be due to a "cooling effect" stemming from the U.S. Federal Reserve Bank's earlier efforts to tackle inflation through interest rate hikes. Although the last of those hikes occurred last year, Rizzo said national policy impacts can take a long time to filter through local economies like Long Island's.
“Elevated interest rates slow down borrowing by consumers, it slows down mortgages, and it slows down businesses because the cost of investment goes up,” he said. “When that happens, you can expect employment to go down.”
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