WASHINGTON – The unemployment rate in the West jumped over 10 percent last month, the first time that regional threshold has been broken in about 25 years. On the state level, eight set record-highs and only two — Nebraska and Vermont — did not report increases.
The Labor Department reported Friday that 48 states and the District of Columbia saw employment conditions deteriorate last month. The fallout from the longest recession since World War II, was the worst in Michigan as automakers cut tens of thousands of jobs. Its unemployment rate rose to 14.1 percent.
The West region reported the highest jobless rate at 10.1 percent. The last time any region had a rate of at least 10 percent was September 1983, when the country was emerging from a severe recession.
The region is home to California, where the jobless rate jumped to a record 11.5 percent last month, Nevada, where it's a record 11.3 percent, and other states that have been slammed when the housing boom went bust — snatching jobs and wealth.
The other six states that set new highs on records dating to 1976 were: North Carolina, Oregon, Rhode Island, South Carolina, Florida and Georgia.
Nebraska's jobless rate dipped last month, while Vermont's was flat.
On the layoffs front, Arizona and Florida suffered the largely monthly percentage decreases, followed by Oklahoma and Arkansas, Kentucky and Michigan.
Joblessness is rising as companies lay off workers and turn to other cost-saving measures, such as trimming hours and freezing or slicing wages, to survive the recession. Housing, credit and financial problems — the worst since the 1930s — have sent the economy into a tailspin.
Factories, construction companies, retailers and financial companies are among the industries that have slashed the most jobs. U.S. manufacturers have suffered a double whammy: U.S. consumers have pulled back along with foreign customers, who are dealing with their own economic troubles.
The national jobless rate has hit a quarter-century high of 9.4 percent, and there's more pain ahead as millions of unemployed Americans find scarce opportunities to land new jobs.
Even if the recession ends later this year as Federal Reserve Chairman Ben Bernanke and other economists predict, the U.S. unemployment rate will keep rising. Companies won't be in any mood to ramp up hiring until they feel certain their own sales and profits are on the rebound and any economic recovery will have staying power.
Against that backdrop, the U.S. unemployment rate is expected to hit 10 percent this year. Some believe it could rise as high 11 percent by the summer of 2010 before it starts to make a slow descent. The highest rate since World War II was 10.8 percent at the end of 1982.
After Michigan, the state with the second-highest jobless rate in May was Oregon at 12.4 percent, followed by Rhode Island and South Carolina at 12.1 percent each. California's was fourth-highest in the country.
The precious-few bright spots: North Dakota and Nebraska each reported the lowest unemployment rate at 4.4 percent. North Dakota has been helped by its oil-production and extraction work, while Nebraska was supported by farm businesses. Neither state got carried away with the housing boom, and hasn't suffered the huge hits to household wealth like California.
By region, the Midwest had the second-highest rate, at 9.8 percent, underscoring the toll of job losses in manufacturing. The South's unemployment rate was 8.9 percent, and the Northeast had the lowest at 8.3 percent.
Joseph Schumpeter's Business Cycles
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Business Cycles
The link above takes you to a pdf file of Joseph Schumpeter's book.
14 years ago
The whole eurozone is a unemployment zone.
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