31 states added jobs in January, though jobless rates rose

From Moody's
From Moody's

WASHINGTON — Thirty-one states and the District of Columbia posted net gains in employment in January, the Labor Department reported Wednesday, providing further evidence that the economy is slowly gaining momentum.

The state-by-state January employment report from the Bureau of Labor Statistics clarifies and deepens the national employment data released last week, which suggested that employers have stopped firing workers and are starting to hire.

In January, the BLS said, California led all states in employment growth with 32,000 net new jobs. Illinois and New York state followed with respective net gains of 26,000 and 25,500, and the state of Washington followed with 18,900. Eighteen states saw employment decrease, and one state saw no change.

"The fact that you have three important and largely service-based economies showing gains may tell us that we have a broader recovery emerging, and this may be a bit of a bright light here," said Steve Cochrane, a managing director at forecaster Moody's in West Chester, Pa.

States with big manufacturing operations showed positive signs last year, he said, thanks to demand created by the government's "cash for clunkers" program and growing exports. So improvement in states with large service sectors is another positive indicator.

"Through the end of last year, most of the recovery was centered around the manufacturing centers or commodity-producing areas such as the Plains states and Texas, and increasingly towards the Southeast," Cochrane said.

Moody's does its own state-by-state economic analysis, and it recently concluded that at the end of last year, 20 states had emerged from recession. Economists overwhelmingly think that the national recession has ended, but the formal declaration of that comes months later from the National Bureau of Economic Research.

Wednesday's news was a bit darker on state unemployment rates. Thirty states and the nation's capital reported an uptick in their jobless rates. Only nine states saw jobless rates fall, and 11 saw no change. The national unemployment rate stood at 9.7 percent in January and February.

The unemployment rate is rising in many states because workers who gave up and exited the labor force are seeking employment again as the economy resumes growing. That means there's greater confidence that the economy is rebounding, but it also suggests that the national jobless rate could rise again.

"While there has been a sharp narrowing in the breadth of unemployment rate increases, unemployment rates through January continued to rise in more states than they fell. Historically, a predominance of declining state unemployment rates confirms the staying power of a downward trend in the national rate," Alan Levenson, the chief economist for investment manager T. Rowe Price Associates, wrote in a note to investors.

Michigan again led all states with an unemployment rate of 14.3 percent in January, followed by Nevada and Rhode Island at 13 percent and 12.7 percent, respectively. South Carolina followed at 12.6 percent and California at 12.5 percent.

The jobless rates in South Carolina and California reflected contemporary record highs, as did the rates in Florida (11.9 percent), North Carolina (11.1 percent) and Georgia (10.4 percent).

On a brighter note, 25 states posted jobless rates that were sharply lower than the national average. North Dakota had the lowest unemployment rate, at 5.4 percent, followed by Nebraska and South Dakota, which respectively had rates of 4.6 percent and 4.8 percent.

The most positive news in Wednesday's report was the sign of new hiring in large, economically important states.

"At least until recently, some of the larger states were some of the weaker economies, in general California, Florida and New York. Among the large states, only Texas had emerged from recession, and the recession there was very shallow," Cochrane said.


BLS state-by-state report

Moody's recession map

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