Fewer jobs, weaker dollar: Labor Department says drop mostly from seasonal changes

As Guam consumers' spending power weakened, chances of finding a second or better job to cope with a higher cost of living may have dimmed, compared to the job market last year.

Job numbers on Guam dipped in June 2008, according to the latest quarterly survey from the Guam Department of Labor.

Retail jobs shrank by 570 in June, down from 11,970 jobs in the industry in March this year, the Labor Department's latest quarterly employment data show. Overall, Guam lost 1,790 jobs between the last two surveyed quarters, shrinking total employment in June to 58,310.

Gary Hiles, chief economist at the Guam Labor Department, said the decline in job numbers isn't as deep when the latest surveyed quarter is compared with employment data a year ago.

The drop in job numbers between the last two quarters can be attributed mostly to what Hiles called "seasonal changes." During the summer, fewer cafeteria and maintenance workers were needed by contractors that do business with island schools and higher educational institutions, Hiles said.

Between the last two surveyed quarters, the number of federal jobs increased by 30, to 3,540, but that wasn't enough to even out job losses in retail stores and the service industry, which includes hotels and restaurants.

The gain in federal jobs contrasts the local government's 940 job losses in the last two surveyed quarters. But if the seasonal job loss is taken out of the picture, GovGuam had only 70 fewer jobs in the last surveyed quarter compared to a year ago, according to the Labor Department data.

Defense spending is a growth spot in the local economy. Hiles said the number of building permits for military projects worth at least $5 million per project increased from $136 million in fiscal 2007 to $252 million in fiscal 2008.

Tourism Decline

The decline in retail and service jobs, which include hotel and restaurant employment, also can be attributed to the fuel-increase-related decline in tourist arrivals, Hiles said.

Tourists are reluctant to go on overseas vacations because of higher travel cost due to fuel prices, Hiles said. More international tourists are also reluctant to travel or spend because of the financial uncertainty in the United States, as well as globally.

During the first several months of the year, Guam's tourist arrivals dipped 5 percent, and in August, visitor numbers took a steeper dive, by 22 percent, according to Guam Visitors Bureau data.

Outlook

There's a positive outlook for longer-term economic growth, Hiles said, based on construction-related activity related to the military buildup.

The relocation of thousands of U.S. Marines and their families from Okinawa to Guam could cost $15 billion and require between 15,000 and 20,000 construction workers, according to a U.S. Government Accountability Office report and a Navy work force projection.

Construction activities related to the Marine relocation to Guam could begin in early 2010.

But within the pre-buildup economic outlook on Guam, Hiles said, "there's a lot of uncertainty due to issues in the financial markets and ... tourism."

Food, Energy

The latest Guam Consumer Price Index shows in the first nine months of this year alone, island consumers have struggled with particularly steep increases in the cost of food and energy:

Island consumers paid $110 in the last surveyed quarter for generally the same food items they paid $101 for at the beginning of this year.

They needed $115 in September to pay for generally the same energy expenses -- including gasoline -- that cost them $102 in January, according to the price index.

The index surveys a wide range of prices of goods and services on island to help gauge cost of living on Guam.