Job numbers bounced back slightly in August, but not as much as unemployment rates across the state would suggest. Southeast remains the hardest hit region in Alaska.

“The state’s seasonally adjusted unemployment rate declined from 11.6 percent in July to 7.4 percent in August, but that decline was more the result of COVID-related disruptions to the statistical methods the Bureau of Labor Statistics uses to calculate rates than an improvement that large in Alaska’s economy,” the Alaska Department of Labor and Workforce Development (DOL) said in a Sept. 18 press release.

Currently, the number of individuals claiming unemployment in Haines is a better indication of how the local workforce is doing, DOL economist Lennon Weller said. Although, this metric has a tendency to undercount the actual number of unemployed individuals, since some unemployed people may not be eligible and some who are eligible may not apply.

In Haines, 213 individuals filed unemployment insurance claims during the month of August, down from the 261 who filed in July, a change of roughly 18%. In contrast, the Haines unemployment rate declined from 16.1% in July to 9.5% in August, a change of roughly 40%.

Based on data collected by DOL, industries with the greatest number of unemployed filers include construction and food service. Just over a quarter of claims were filed by people in the 35-44 age bracket.

“Things are somewhat improving from how they were in late spring and early summer—claims down and unemployment is down to certain extent—but we haven’t recovered to the extent the unemployment rate indicates,” Weller said.

The discrepancy is due, in large part, to the way the way the unemployment rate is calculated. It’s based on data from a number of national surveys, including the Current Population Survey, administered by the U.S. Census Bureau.

“We got tugged around by what the national Current Population Survey is doing,” DOL economist Karinne Wiebold said.

The survey samples 60,000 households across the U.S. on a monthly basis, and while the findings are usually accurate at the national level, they’re less so at the state level, particularly in states with smaller populations.

In Alaska, the survey polls roughly 1,000 people and around 80% are usually Anchorage-based, Weller said. This means for places like Haines, at most, only a handful of people are surveyed. Additionally, this year, survey response rates are down across the board, he said.

The disparity between unemployment insurance claims and unemployment rates in Alaska was something economists at DOL had anticipated, Weller said.

“I think we’ve gotten lucky up until now, but these factors have finally caught up with us. This was the first month where we did see the (unemployment rate) come out and go, ‘Ooh, that doesn’t jive with the other data sets,’” Weller said.

Statewide, the August unemployment rate suggests roughly 21,000 people applied for unemployment insurance the week the Current Population Survey was conducted, but the actual number of filers was roughly 48,600.

Based on unemployment insurance claims in August, Weller said the state’s unemployment rate is likely at least 12%.

Weller said another factor to keep in mind, particularly as the economic effects of the COVID-19 pandemic drag on, is that a decline in the unemployment rate doesn’t always translate to increased employment. In some cases, the unemployment rate might drop as people leave the workforce permanently.

“As things continue to drag on, people may give up looking for jobs,” Weller said. “A drop in the unemployment rate isn’t always a good thing, and likewise, an increase in the unemployment rate isn’t always a bad thing. It could mean people are feeling more optimistic and starting to look for work again.”

Statewide, Southeast remains the hardest hit region in terms of job losses.

“Southeast has been hit super hard because of its reliance on summer tourism, and this year, there were no tourists,” Wiebold said.

The region saw a 17.3% decline in jobs this August compared to August 2019. As a whole, Alaska is down 11.2%, according to DOL’s October 2020 Alaska Economic Trends publication. Haines and Skagway have routinely had some of the highest unemployment numbers in the region since the pandemic began.