Double-digit unemployment spreads

A growing number of states endured double-digit unemployment rates in January, and others are close behind, buttressing fears that the national jobless rate could reach 10 percent by year’s end.

The rising joblessness reflects the pain that the housing, credit and financial crises - the worst since the 1930s - has caused workers and companies. The latest figures were issued Wednesday in the Labor Department’s monthly report on state unemployment.

“There is hardly any escape from this recession,” said Steven Cochrane, managing director of Moody’s Economy.com. “With state unemployment rates rising so quickly, it reinforces the notion of a 10 percent national unemployment by the end of the year.”

In January, jobless rates rose in 49 states and the District of Columbia. Louisiana was the only state to record a drop.

About 5.1 million people are drawing state unemployment insurance, near a record high, the federal government said last week. The crush has exhausted unemployment funds in New York, California and elsewhere, forcing them to tap the federal government for money to keep paying benefits.

Joblessness was rife in the West and Midwest, where the loss of manufacturing, construction, retail and other jobs tied to the collapsed housing market was especially severe.

The West - where California and some other states led the housing boom - has been battered by the housing bust. And jobs are vanishing from the Midwest as the troubles of Detroit’s beleaguered automakers spill over and reduce employment in industries linked to autos, such as car parts and other components used in production.

Four states - California, South Carolina, Michigan and Rhode Island - registered unemployment rates above 10 percent in January. The number in the District was 9.3 percent, in Maryland 6.2 percent, and in Virginia 6 percent.

Laid-off textile, clothing and other factory workers in South Carolina are hard-pressed to find work elsewhere. In Rhode Island, state leaders are still seeking a high-tech replacement for the long-ailing manufacturing sector.

In December, only Michigan had a double-digit jobless rate. One month later, four states did.

Nick Davies is job hunting in South Carolina.

“I’ll take anything you’ve got,” the 47-year-old engineer told a recruiter. He moved to Myrtle Beach from Peoria, Ill., after being laid off from Caterpillar three months ago, figuring the job market had to be better in the sunny South. Now, he’s not so sure.

Across the country, David Rhey, 28, a father of three, worries about losing his job with the city of Sacramento, Calif., which is preparing layoffs.

“We’re all just hanging on until we can find something else,” said Mr. Rhey, a seasonal parks employee. He runs his own tree-trimming business on the weekends and frets about being able to afford his living expenses if he loses his city job.

The unemployment rate in California jumped to 10.1 percent in January, from 8.7 percent in December. Michigan’s rate hit 11.6 percent in January, the highest in the country.

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