The local unemployment rate in the Buffalo Niagara region rose to 4.5% in December, the highest level since February 2022, according to a report by the state Labor Department. The increase was driven by a 9% rise in the number of local workers reporting they can’t find a job. However, despite this spike, the unemployment rate in the area remains comparatively low.

The unemployment rate has steadily increased since last spring, suggesting the job market is less tight than during the previous period of significant worker shortages. The number of unemployed individuals has risen by about a third over the last year. This increase was previously offset by growth in the labor force, indicating more people were entering the job market and finding work. However, December saw a 3% decrease in the number of regional workers, with the labor force shrinking by approximately 14,000 people.

These changes mean there is now more slack in the job market, potentially enabling local employers to fill positions more easily. Nonetheless, it remains to be seen how much hiring will take place, as many employers have invested in labor-saving technology or altered work processes to function with fewer employees during periods of staffing difficulty. Some employers have turned part-time jobs into full-time positions or have offered more hours to current staff to compensate.

The state Labor Department also reported that more workers are filing for unemployment benefits for the first time, exceeding 1,000 applications per week since mid-November. While this might be expected due to the end of holiday-related jobs, slow seasonal hiring has been notable, with very little change in retail job numbers from September to December, contrasting with the 2,400 job additions seen in the same period in both 2018 and 2019.