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Jobless rates rise in fewer metro areas in July

In a sharp improvement, the largest U.S. metropolitan areas were evenly split in July between those where unemployment rates rose from June and those where rates fell.
/ Source: The Associated Press

In a sharp improvement, the largest U.S. metropolitan areas were evenly split in July between those where unemployment rates rose from June and those where rates fell.

In June, by contrast, 90 percent of the 380 metro areas had seen their jobless rates rise from the previous month.

Much of the improvement was due to seasonal factors. They include the hiring of farm workers in many agricultural states and lower unemployment in college towns after a jump at the start of summer.

The metro employment figures, issued Tuesday by the Labor Department, aren't adjusted for such seasonal changes, so they tend to be volatile from month to month. And many of the changes in local unemployment rates in July were too small to signal larger trends.

The local figures also reflect the modest improvement seen at the national level in July, when the jobless rate fell to 9.4 percent, from 9.5 percent in June. On Friday, the Labor Department will report the national unemployment rate for August. Many economists expect it to tick back up to 9.5 percent.

An Associated Press analysis of Labor Department data found that unemployment rates fell in 168 metro areas and rose in 168 others. No change was recorded in the remaining 44 areas.

The biggest improvement occurred in Kokomo, Ind. Its jobless rate dropped to 14.4 percent in July from 19.1 percent the previous month. The reopening of a Chrysler plant that makes transmissions caused much of that drop, said Christopher Cornell, an economist at Moody's

Chrysler reopened many factories in late June and July after emerging from bankruptcy protection. The company employed more than 4,500 people in the Kokomo area at the end of last year.

But Fiat Group SpA, which owns a 20 percent stake in the company and manages Chrysler, is deciding which plants to close permanently.

"People are extremely nervous in Kokomo," Cornell said. "Their fate is literally up in the air."

Other areas that saw sharp drops in their unemployment rates were Wenatchee-East Wenatchee, Wash., Bismarck, N.D., and Grand Forks, N.D., all of which include agricultural production. Wenatchee bills itself the "apple capital of the world."

Some of the hardest-hit areas are still suffering from a manufacturing sector that is recovering but has yet to return to strength. Peoria, Ill., where heavy equipment maker Caterpillar Inc. is based, endured the largest jump in joblessness in July: from 9.6 percent to 12.3 percent. Caterpillar has said it is cutting thousands of jobs in the face of plunging overseas sales.

The next-largest increase was in nearby Decatur, Ill., where the unemployment rate rose to 13.7 percent from 11.2 percent.

Even in places where the rate has fallen, joblessness remains high. Overall, 139 metro areas reported unemployment of 10 percent or above, compared with 144 metro areas in June.

Many economists say they think the unemployment rate will top 10 percent nationally by the end of the year.

Nineteen areas reported jobless rates of 15 percent or higher in July, one more than in June. Eight of those areas were in California; five were in Michigan.

The unemployment rate of 30.2 percent in El Centro, Calif., was the highest in the nation, followed by Yuma, Ariz., at 26.2 percent. The two areas are next to each other and have long suffered high unemployment due to many seasonal farm workers.

Most of the bright spots on the unemployment map are in the upper Midwest. Bismarck had the lowest jobless rate in July, at 3.1 percent, down from 3.8 percent in June. The next-lowest rates were in Fargo, N.D., Rapid City, S.D., and Sioux Falls, S.D. Those regions have benefited from prices for agricultural commodities that remain above historical trends.

Among larger metro areas, Michigan's Detroit-Warren-Livonia had the highest unemployment rate, at 17.7 percent, up from 17.1 percent in June. The next-highest were Riverside-San Bernardino-Ontario, Calif.; Las Vegas; Providence-Fall River-Warwick, in Rhode Island and Massachusetts; and Charlotte-Gastonia-Concord, in North and South Carolina.

Oklahoma City had the lowest jobless rate among large cities, with 5.9 percent, followed by Washington, D.C., and its Virginia and Maryland suburbs, at 6.2 percent.