Jobless data for LI can be misinterpreted

Long Island's unemployment rate in July was 7.1 percent, unchanged from a month earlier and down from 7.5 percent in July 2010.

The rate, released by the state Department of Labor, comes days after the announcement that Long Island lost 7,800 jobs compared to July 2010. But the latest unemployment figure is not a rally for jobs, but rather an indication of a shrinking labor force due to more discouraged workers -- unemployed individuals who have given up the job search and are not counted as a part of the labor force, Long Island economists said.

"Over the year, the unemployment rate has dropped . . . but we've had approximately a 2 percent decline in the number of people in the labor force," said James Brown, an economist for the state Labor Department. "The total is shrinking -- compared to last year, you have fewer employed residents, and fewer unemployed residents. People are opting out of the job market."

The unemployment rate only accounts for people actively searching for jobs, and does not count those who work part-time or the discouraged.

The total number of people in the Long Island labor force fell by about 33,000 since last year, and the number of unemployed persons fell by about 8,000. Since June, the labor force has also fallen, but the number of unemployed ticked up by 200 individuals.

More detailed figures from the state Labor Department also revealed that the education sector accounted for the majority of job losses reported last week in the education and health services industry in July. The entire sector last month recorded its first decrease in jobs -- by 1.3 percent -- since 1990.

The job situation on Long Island will probably not get any better if the federal government doesn't take an initiative, and consumer demand and business confidence remain low, said Martin Melkonian, a business professor at Hofstra University.

"There's been a lot of talk over the past year about [local] governments being forced to balance their budget," he said. "And the full impact of that has yet to be felt, but I think that will be happening in the next couple of months -- we're going to see further deterioration for public sector jobs."

Despite a shrinking labor force, the Hempstead Career Center Tuesday was bustling with activity.

Sergio Hernandez, 42, an accountant who has been unemployed for eight months, said he expanded his job search when he couldn't get another job in the financial industry and applied to do accounting work at nonprofits and manufacturing companies. But as the time since he became unemployed ticks by, he also worries. "I have savings," he said. "They say save for six months, but when that runs out I don't know how I'm going to pay my mortgage."