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Long Island unemployment rate rises to 7.8%

The unemployment rate on Long Island jumped to 7.8 percent in January, the highest since 1992, when the area was battling both a defense industry downsizing and a recession. But there were positive signs too.

The January figure is up from 7 percent in December and 6.8 in January 2009, state jobs data released yesterday show.

Despite that deterioration, the Labor Department report also indicated that Long Island's economy could be poised for job growth, local economists said. In the 12 months that ended in January, private-sector job losses narrowed to an annual rate of 9,700, the lowest since October 2008. That compares to a rate of 45,200 in April.

Gary Huth, the department's principal economist for the Island, said the data show an improved job market, but he is cautiously optimistic.

"Based on these numbers, you'd say we are back on a growth cycle," Huth said. "But I'm approaching it cautiously. This is one month's worth of numbers."

Pearl Kamer, chief economist for the Long Island Association, said the narrowing declines taken together with improved performances in local sales tax revenue and the housing market point to improvement.

"These statistics are highly consistent with an economy that may not be in recovery yet but is bottoming out," she said.

Still, evidence of the great recession is clear. The number of unemployed workers jumped to 115,700 in January, from 101,300 a year ago, nearly rivaling the 117,600 in July 1992, Kamer said.

"After that [unemployment] started going down, and we are close to that now," she said.

The number of private-sector jobs on the Island now totals 995,400, the lowest since 2003. And revised numbers paint an even grimmer picture of how damaging the recession has been. Whereas Labor Department data last year showed just one month when the year-to-year annualized job loss was 40,000 or more, revised data show seven such months, based on a Newsday analysis. And the revised data show that the recession here began in June 2008, not September 2008, as previously thought.

In New York City, private sector employment fell by 78,100 jobs, or 2.5 percent. Unemployment was 10.4 percent, compared with 7.5 percent a year ago. The state unemployment rate in January was 9.4 percent, up from 7.7 percent a year ago.

Long Island's leisure and hospitality sector added the most jobs, 4,300, outpacing educational and health services, which expanded by 3,000 jobs. Manufacturing lost the most jobs, 5,300.

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