September unemployment rate rises in 23 states

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By David M. Dickson

Even as the manufacturing and service sectors of the U.S. economy simultaneously expanded in September for the first time since the recession began in December 2007, payrolls declined in 43 states last month, pushing up the unemployment rates in 23 of them.

Fourteen states suffered double-digit jobless rates in September, led by Michigan's 15.3 percent, the Labor Department reported Wednesday. Several states set record-high jobless rates last month, including Florida (11 percent), Rhode Island (13 percent) and Nevada (13.3 percent). The District's unemployment rate increased to 11.4 percent last month as employment declined by 1.4 percent.

The national unemployment rate reached a 26-year high of 9.8 percent in September after rising 0.1 percentage point from its August level. But it would have jumped significantly higher, hitting 10.2 percent, if the civilian labor force did not shrink by 571,000 people, according to calculations by Alfred Tella, a former Georgetown University research professor of economics. The civilian labor force includes people working or looking for work.

Mr. Tella doesn't expect any significant increase in employment in the near future.

"Before taking on new hires, employers will increase the reduced hours of their existing workers," Mr. Tella explained. Production and nonsupervisory employees worked an average of just 33 hours per week last month, matching June's record low in data that date to 1964.

The Federal Reserve issued a cautiously optimistic review of the economy Wednesday. "Reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered," the Fed reported in its Beige Book, which summarizes recent economic activity throughout the central bank's 12 districts.

"Labor market conditions were generally reported as weak or mixed across districts," the Fed said.

In New Jersey, where voters will decide Nov. 3 whether incumbent Democratic Gov. Jon Corzine will serve a second term, the Labor Department reported the unemployment rate reached 9.8 percent last month, its highest level since 1977.

In Virginia, where a new governor will be elected next month, the jobless rate edged higher by 0.1 percentage point, reaching a relatively low 6.7 percent. Only four states had jobless rates below Virginia's - North Dakota (4.2 percent), South Dakota (4.8 percent), Nebraska (4.9 percent) and Utah (6.2 percent).

The U.S. economy has suffered a net loss of more than 8 million jobs since the recession began, the largest decline in employment since the Great Depression.

Altogether, more than 15 million people are officially unemployed in the United States, and a record 35.6 percent of them have been jobless for 27 weeks or longer, according to Labor Department data.

An additional 9.2 million workers reported in September that they were working part time for economic reasons. About 2.2 million said they wanted to work and were available to work, but had not looked for a job during the previous four weeks and were thus not counted as unemployed.

When these two groups of workers are added to the 15.1 million who are officially classified as unemployed, the Labor Department's "alternative measure of labor underutilization" reached 17 percent in September, its highest level since the statistic was first computed in 1994.

September's jobless data "signaled a painfully slow path to stabilization," said Nigel Gault, chief U.S. economist for IHS Global Insight.