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Jobless rates rise in U.S. metro areas in April

Jobless rates rose in all the largest U.S. metropolitan areas for the fourth straight month in April, according to government data released Wednesday.
/ Source: The Associated Press

Jobless rates rose in all the largest U.S. metropolitan areas for the fourth straight month in April, a trend likely to persist even as the recession eases.

The Labor Department said Wednesday that unemployment in April rose from a year earlier in all 372 metropolitan areas it tracks. Indiana’s Elkhart-Goshen’s rate jumped to 17.8 percent, up 12.7 percentage points from a year ago. The Indiana region, which posted the largest increase from last year, has been pounded by layoffs in the recreational vehicle industry.

The second-highest jump occurred in Bend, Ore. Its rate rose to 15.6 percent, up 9 percentage points from last year. The region of North Carolina’s Hickory-Lenoir-Morganton saw its unemployment rate rise to 14.9 percent, a gain of 8.8 percentage points from last year.

Most of the regions hardest hit have suffered big layoffs in manufacturing or have been clobbered by the collapse of the housing market, economists said. Factories reduced production as businesses slashed supplies of goods amid dwindling customer demand, said Mark Vitner, economist at Wachovia.

All those negative forces rippled through metropolitan areas.

“Municipal governments are strapped and have cut back,” Vitner said. “Retailers have closed shop. Problems have multiplied.”

Among the bright spots was Iowa City, home of the University of Iowa, which reported the lowest jobless rate: 3.2 percent. It was followed by Ames, Iowa, and Houma-Bayou Cane-Thibodaux, La., at 3.6 percent each. The Louisiana region, which lies on the coast, serves as a support area for the offshore petroleum industry in the Gulf of Mexico.

El Centro, Calif., again suffered the highest unemployment rate in the country: 26.9 percent. Unemployment there is notoriously high because of many seasonal farm workers without jobs.

Following behind were Yuma, Ariz., with a jobless rate of 20.3 percent, Merced, Calif., at 18.3 percent and Yuba City, Calif., at 18.2 percent.

The national jobless rate, now at a 25-year high of 8.9 percent, is expected to reach 9.2 percent when the government releases the May employment report Friday. Many economists expect the rate to top 10 percent by year’s end.

The news is slightly better when comparing metro jobless rates in April to March. But the figures aren’t seasonally adjusted, making month-to-month comparisons more volatile.

Still, of the 49 largest metro areas, the unemployment rates in 41 declined. Four others showed no change. St. Louis reported the biggest monthly decline, dropping to 8 percent from 9.4 percent. The next-largest declines of 0.9 percentage point each occurred in Louisville, Ky., and Rochester, N.Y., which dipped to 9.3 percent and 7.4 percent, respectively.

“These are not mustard seeds or green shoots,” Vitner said.

Hiring typically picks up in the spring because of longer days and better weather, Vitner noted. He cautioned against deriving any economic clues from the seasonally unadjusted figures.

Kent Gardner, an economist at the Center for Governmental Research in Rochester, agreed and said the federal figures are better than local figures for identifying national trends because the sample size used in an area like Rochester is relatively small.

“I’m not getting out the party balloons,” Gardner said.

Among the four areas that posted monthly unemployment rate increases, three were in Ohio. The rate in Columbus edged up 0.1 percentage point to 8.2 percent, Cincinnati’s grew by the same amount to 9.1 percent and Cleveland’s rose 0.3 percentage point to 9 percent.

Ken Mayland, an economist in Cleveland, said the increases in Ohio probably resulted from the region’s heavy reliance on the auto industry, outpacing any seasonal tendency toward flat or lower unemployment.

“If I were to venture a guess, it’s the heavy boot of the auto industry on the necks of these Midwestern regional economies,” he said.

Chicago posted the biggest monthly gain in April, rising to 9.8 percent from 9.4 percent.

Illinois Department of Employment Security spokesman Greg Rivara said some of the increase may have been due to layoffs covering about 3,700 jobs announced in January and February. Among the local employers announcing cuts was Motorola, which laid off 497 people. The jobs in most cases didn’t end until well into March or April.

Rivara also said comparisons based on figures that aren’t adjusted to account for cyclical job gains and losses can be incomplete.

In Elkhart-Goshen, layoffs at RV makers Monaco Coach Corp. Keystone RV Co. and Pilgrim International have clobbered the region.

Bend had been the center of the central Oregon real estate and construction boom, fueled by retirees from California. But the credit crunch and falling home prices made it harder for them to cash out of their existing homes. Losses in construction jobs also have battered the area. And the impact has rippled through retail and service sectors.

North Carolina’s Hickory-Lenoir-Morganton has been especially hammered by layoffs in manufacturing and has had trouble attracting new employers to offset job losses at textile and furniture plants, economists said.