Alabama unemloyment rises to 11 percent, highest figure in 26 years; downturn brief

Alabama unemployment highest in 26 years

MONTGOMERY, Ala. — Alabama’s unemployment rate has risen to 11 percent — a 26-year high that wiped out a brief hope of recovery for Alabama’s job market.

State Industrial Relations Director Tom Surtees announced Friday that the rate rose from 10.5 percent in November.

The December rate is the highest since Alabama’s jobless rate hit 11.1 percent in January 1984.

It also ended the optimism that state officials had a month ago when they announced the rate had declined from October to November, the first drop in more than two years.

“Although we became a little hopeful due to last month’s unemployment decrease, I think we all realize the reality of the economic situation in this country,” Surtees said.

University of Alabama economist Sam Addy said the next month’s unemployment rate could go up to 11.2 percent or 11.3 percent due to temporary holiday workers in retail stores being laid off in January. But he said Alabama is close to seeing the unemployment numbers reach a peak.

“We see this year as the beginning of the recovery, 2011 will be better, and 2012 will be even better,” said Addy, director of Alabama’s Center for Business and Economic Research.

Addy said his outlook is based on trends in the latest unemployment figures, including a slowdown in the loss of manufacturing jobs. Within manufacturing, jobs in the durable goods sector, such as wood products and machinery and transportation manufacturing, are starting to grow, he said.

Gov. Bob Riley said he hopes the figures will encourage the Legislature to pass two bills aimed at creating jobs. One would provide a $1,500 tax credit to companies that hire unemployed Alabamians. The other would provide a $1,500 tax credit for each new job a company creates in the state’s hardest hit counties.

Those counties are mostly rural, with Wilcox County leading the state in unemployment at 24.5 percent. It is followed by Monroe County at 20.2 percent and Dallas County at 20.1 percent.

The counties with the lowest unemployment are Shelby at 7.6 percent, Madison at 7.7 percent, and Coffee at 8.1 percent.