Unemployment Up in 44 States

Layoffs may be slowing, but the recession continues to devastate the job market, and the unemployment rate is likely to hit 10% by yearend

By Moira Herbst

Forty-four states lost jobs in April as the recession continued to hit hard, the Labor Dept. reported on May 22.

Michigan's April jobless rate was the highest in the country, reaching 12.9%, followed by Oregon at 12%, South Carolina at 11.5%, Rhode Island at 11.1%, and California at 11%. California led in the total number of jobs lost with 63,700, followed by 39,500 in Texas, 38,400 in Michigan, and 25,200 in Ohio. These states faced heavy layoffs in manufacturing, construction, and retail.

More than 271,000 workers were let go in April's cuts, more than double the total from April 2008. Since the start of the recession in December 2007, the U.S. has lost a net total of 5.7 million jobs. The nationwide unemployment rate as of April was 8.9%, up from 8.5% in March.

Waiting for Recovery Signs

Nationally, the pace of job losses slowed in April for the third consecutive month, leading to muted optimism among some economists and a stock market rally. But even as layoffs slow—indicating employers have cut too close to the bone to eliminate more positions—the nationwide unemployment rate is expected to reach at least 10% by the end of the year. Employers won't begin hiring again until there are clearer signs of recovery and they feel confident enough to invest in capital spending, say economists.

The May 22 jobs report showed that some states maintained remarkably lower unemployment rates than the national average. North Dakota again registered the lowest unemployment rate in the U.S. at 4%, followed by Nebraska at 4.4%, Wyoming at 4.5%, and South Dakota at 4.8%.

Some states actually added jobs, representing the few other bright spots in the report. Arkansas and Montana tied for the biggest over-the-month job gains, at 1,500 each. They were followed by Florida, which saw an increase of 1,300 positions.

Still, nearly 6.7 million people in the U.S. are receiving state unemployment benefits, the federal government reported—the highest in more than four decades. The rush to collect has sapped the unemployment funds of California, New York, and other states, forcing them to take federal money to continue paying benefits.

With reporting by the Associated Press. Herbst is a reporter for BusinessWeek in New York.

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