Eight states hit by double-digit unemployment

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By David M. Dickson

The unemployment rate increased in 46 states in March and eight states are now suffering from double-digit joblessness, the Labor Department reported Friday.

The eight are: California, North and South Carolina, Indiana, Michigan, Nevada, Oregon and Rhode Island.

With a 12.6 percent unemployment rate, Michigan continues to maintain the nation's highest jobless rate, followed by Oregon (12.1 percent) and South Carolina (11.4 percent). In California, where the jobless rate is 11.2 percent, more than 2 million would-be workers were unemployed in March.

As the national unemployment rate, which reached 8.5 percent last month, continues to rise, more and more states will be joining the double-digit club, analysts said. In fact, nine states, including the big states of Florida (9.7 percent), Illinois (9.1 percent) and Ohio (9.7 percent), already have unemployment rates between 9 percent and 10 percent.

"The national unemployment rate for April will rise to 8.8 or 8.9 percent," said Mark Vitner, senior economist at Wachovia Corp. in Charlotte, N.C. "It's pretty much baked in the cake." Wachovia expects the national unemployment rate to peak at 10.5 percent in the middle of next year, Mr. Vitner said.

"The pace at which employment is falling remains intense in most states," said Alexander Miron of Moody's Economy.com. "During the first quarter, all 50 states reported decreases in employment." He added that "the outlook for most states is grim."

Mr. Vitner noted that the four states with unemployment rates below 5 percent - North and South Dakota, Wyoming and Nebraska - were all sparsely populated and experienced no growth in their cumulative labor force during the past year.

Few industries and few states have escaped the rising jobless trend.

"Over the past year, virtually every state lost jobs in construction, manufacturing, retail/wholesale, utilities, information services, finance, professional services, leisure/hospitality and other services," said Charles McMillion, president and chief economist of MBG Information Services. "The costly and deeply dysfunctional private health and education bureaucracies continue to be the only major sectors adding jobs in most states," he noted.

Since the U.S. recession began, the government sector has added 169,000 jobs while the private sector has jettisoned more than 5.3 million employees. During February and March, however, 38 states and the District of Columbia lost government jobs, Mr. McMillion's research shows.

Mr. Vitner of Wachovia expects the economy to hit its "absolute bottom" late this year. But the unemployment rate will continue to rise. Unlike the previous deep recessions of 1973-75 and 1981-82, manufacturing, which now comprises a much smaller share of the U.S. economy, can "no longer supply the kick to jump-start our economy," he explained.