Economists say layoffs will continue

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(Host) The state’s unemployment rate held steady last month, but economists say the worst is yet to come.

And the unemployment numbers released late last week don’t reflect several major lay offs in Rutland County.

VPR’s John Dillon reports.

(Dillon) The unemployment rate for October was just over 5 percent.

Last year at this time it was about 4 percent. And Vermont will probably see more layoffs in the months ahead. Economist Tom Kavet told the Legislature last week that unemployment will hit 7 percent here as the recession worsens.

Kavet says as unemployment grows, there’s a ripple effect throughout the economy as people have less money to spend.

(Kavet) This will translate into weakness in all the consumption taxes – sales and use, meals and rooms, motor vehicle purchase and use.

(Dillon) Manufacturing jobs continued to take a hit. That was the case in Rutland County, as Vermont Plywood laid off 76 people

The company blamed the sharp economic downturn which has caused a decline in orders.

Dick Heaps, a consulting economist in Westford, says the state will continue to see a loss in manufacturing jobs.

(Heaps) "Manufacturing even before the economy weakened was the sector that was shedding jobs. And now that there’s been a tremendous job in demand for good, manufacturing is going to be shedding more jobs. So it’s going to be the sector that in part leads us into this recession."

(Dillon) Heaps says the job cuts have spread beyond companies making products for the housing industry.

(Heaps) It’s not just confined, as one would have thought when the housing market really cooled, to that part of manufacturing that’s associated with producing rugs, and lamps and furniture and all those things. It’s now spread to the consumer sector, of course, from automobiles other sorts of consumer products. It’s even spread into the high tech industry now.

(Dillon) The recent job losses in Rutland County probably won’t show up in the state’s unemployment statistics for a month or so.

Labor Commissioner Patricia Moulton Powden said some areas of the economy remain strong.

(Powden) "We continue to see steady and significant growth in health care and social services. And that we don’t anticipate is going to change. There are still needs in those industries for workers. And of course many of the health care jobs do require specialized skills, but many do not."

(Dillon) Powden says the state maintains a database of available jobs and can help job hunters with employee retraining.

(Powden)  "And in some cases it may be that we look to try to help match up folks who may need some relocation. As an example, we have manufacturers in Bennington County that continue to have struggle to find qualified labor. And Rutland isn’t that bad a commute and gas prices going down could present some opportunities there."

(Dillon) Powden says there are also job opportunities in the ski and resort industry. She says the work may be temporary, but that some jobs come with perks like a free lift ticket.

For VPR News, I’m John Dillon in Montpelier.

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