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Rhode Island’s rise in joblessness paces the nation

01:00 AM EST on Saturday, January 31, 2009

By Benjamin N. Gedan

Journal Staff Writer

The rise in Rhode Island’s unemployment rate led the nation last year, according to new data from the U.S. Department of Labor.

Only North Carolina, where unemployment grew by 4 percentage points, and Nevada, where it increased by 3.9 percentage points, approached the 4.8 percentage-point spike in Rhode Island.

Rhode Island’s year-end unemployment rate, 10 percent, was not the worst in the country; that was Michigan’s ignominy.

But the Ocean State’s economy is by far the most troubled in New England. Connecticut, where 7.1 percent of job seekers could not find jobs last month, has the region’s second-highest jobless rate. It is followed by Maine (7 percent), Massachusetts (6.9 percent), Vermont (6.4 percent) and New Hampshire (4.6 percent).

No state avoided a rise in unemployment last month, as disappointing holiday retail sales added to the national sense of economic gloom. In addition to slumping consumer spending, the U.S. economy has been battered by plummeting real estate prices, the evaporation of bank loans for businesses and consumers and painful stock market declines that have eaten away at household savings.

“Regional and state unemployment rates were universally higher in December,” the federal Bureau of Labor Statistics reported. “All 50 states and the District of Columbia recorded both over-the-month and over-the-year unemployment rate increases.”

Earlier this month, the Labor Department announced the national December jobs figures, reporting that the U.S. unemployment rate had reached 7.2 percent. It has not been that high for 16 years.

On Jan. 23, the Rhode Island Department of Labor and Training published data from the state, where a double-digit unemployment rate had not been experienced for three decades.

The rise in joblessness has brought about deep state budget cuts and exhausted unemployment resources, The Wall Street Journal has reported. In Rhode Island, where the jobless fund is nearly empty, the state recently hired additional staff to process unemployment-compensation requests.

In general, the Northeast has lifted the national average, recording a 7-percent regional unemployment rate last month, according to government data.

But Rhode Island is clearly a laggard. Never fully recovered from the decline of the state’s manufacturing backbone, it has seen its most promising industries, such as financial services and hospitality, bludgeoned by the deepening recession.

Only Michigan –– where the collapsing auto industry has left 10.6 percent of jobseekers unable to find work –– ended the year with a higher unemployment rate than Rhode Island. Just four other states have unemployment rates above 9 percent, but only Michigan and Rhode Island have hit double digits.

Several states, however, appear to be catching up. The Labor Department reported that Indiana’s jobless rate ballooned to 8.2 percent in December from 7.1 percent in November, the result of manufacturing layoffs and cutbacks in construction and retail, according to the Associated Press.

The unemployment rate in South Carolina “bolted” to 9.5 percent from 8.4 percent, the Associated Press reported.

Unemployment, at 3.4 percent, is lowest in Wyoming, followed by North Dakota (3.5 percent) and South Dakota (3.9 percent).

But few Americans are sharing in that success. Combined, the three states have fewer than 2 million residents, less than Houston.

New EnglandJobless Rates

(Year end)
Rhode Island 10%
Connecticut 7.1
Maine 7
Massachusetts 6.9
Vermont 6.4
New Hampshire 4.6
Source: US Dept. of Labor

bgedan@projo.com

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