By Timothy R. Homan March 10 (Bloomberg) — Unemployment decreased in nine U.S. states in January, led by an improvement in Michigan that demonstrates factories are driving the economic rebound. Michigan’s jobless rate fell to 14.3 percent, still the highest in the nation, from 14.5 percent in December, according to figures issued today by the Labor Department in Washington. New York and New Jersey were among the eight states where unemployment decreased by a tenth of a point. The “most stable economies are those more exposed to manufacturing,” said Steven Cochrane , director of regional economics at Moody’s Economy.com in West Chester, Pennsylvania. “This is a recovery that’s really kind of concentrated.” Efforts to stabilize inventories and rising exports are prompting companies like General Motors Co. to call back some dismissed workers. The jobless rate climbed in 30 states at the start of 2010, signaling the thawing of the labor market is not broad-based and indicating it will take years to recover the 8.4 million jobs lost the recession began in December 2007. Unemployment in the U.S. unexpectedly fell to 9.7 percent in January from 10 percent the prior month, according to figures from the Labor Department. The government’s report last week showed the rate held at 9.7 percent in February, compared with a projected increase to 9.8 percent, according to the median forecast of economists surveyed by Bloomberg News. Payrolls fell by 36,000 last month following a 26,000 decline in January. The loss of jobs during the recession has been the biggest of any economic slump in the post-World War II era. State Payrolls Today’s state breakdown showed employment, which is calculated by a survey of businesses, increased in 31 states, led by California, Illinois and New York. Missouri and Ohio showed the biggest payroll decreases at the start of the year. The state and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from smaller surveys, making the national figures more reliable, according to the government’s Bureau of Labor Statistics. State totals showed the economy gained 135,000 jobs in January. Unemployment in the Detroit area, home to General Motors and Ford Motor Co. , dropped to 15.3 percent from 16 percent in December, contributing to the decrease in Michigan’s jobless rate. Jobs at GM GM said it may fill most of the 5,500 jobs created by its $1.4 billion retooling of 18 U.S. factories with laid-off workers, Diana Tremblay, the automaker’s manufacturing and labor chief, said in an interview Feb. 23. The company’s 5,000 to 6,000 workers on indefinite layoff have first rights to any openings from the factory upgrades, including a third shift in Lordstown, Ohio, announced last month. Sixteen states in January had an unemployment rate that exceeded the 9.7 percent national average, today’s report showed. New York City’s unemployment rate declined to 10.4 percent from 10.5 percent the previous month, the state’s Labor Department reported March 4. The state’s jobless level fell to 8.8 percent from 8.9 percent in December, while New Jersey’s decreased to 9.9 percent from 10 percent. Unemployment in California, Florida, Georgia, North and South Carolina and the District of Columbia climbed to the highest levels since records began in 1976. Construction Slump Florida’s jobless rate rose to 11.9 percent from a revised 11.7 percent in December. Job losses in the state, where population declined last year for the first time since World War II, have been led by construction. The industry lost 5,500 jobs in January from a month earlier, bringing the total over the past year to 90,700. “Developers can’t do new projects because they’re losing existing projects in foreclosures,” said Suzanne Breistol, whose Florida Construction Connection Inc. recruits for builders. “They used to hire staff in anticipation of getting a job, but now they can’t afford that so they won’t hire until they get a job.” A national unemployment rate will average 9.8 percent this year, according to the median estimate of economists surveyed last month by Bloomberg, signaling state budgets will be strained by decreases in tax revenue and rising jobless insurance payments. Revenue shortfalls are translating into job cuts. New Jersey Transit, the third-busiest U.S. commuter-rail service, will cut 200 jobs, reduce executive salaries by 5 percent and trim contributions into employees’ 401(k) retirement plans by one-third to help close a $300 million budget deficit. The firings of both unionized and non-union employees will total about 2 percent of the workforce, the biggest one-year reduction in agency history, Executive Director James Weinstein said last week in a statement. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
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Unemployment Eased in Nine U.S. States in January, Labor Department Says
