June 20, 2009 in Business

Jobless rate in West worst in the country

Jeannine Aversa Associated Press
 
Associated Press photo

Roger Knecht looks for a job at the One Stop Center in Garden Grove, Calif., on Friday.
(Full-size photo)

WASHINGTON – The housing bust sent the unemployment rate in the West bolting past 10 percent in May – the first time in more than 25 years that a region of the United States has suffered double-digit joblessness.

A Labor Department report released Friday showed the West absorbing the worst of the recession, which is now the longest since World War II. California, Nevada and Oregon endured particularly heavy job losses in construction, manufacturing and tourism.

The region has been pounded because it was the epicenter of the housing boom that collapsed. As home values plummeted, the West lost jobs and wealth, and consumers grew skittish about spending.

“The West is where houses are being abandoned most quickly because it has the largest percentage of the population underwater – owing more on their houses than they’re worth,” said Robert Reich, labor secretary under President Bill Clinton and now a professor at the University of California, Berkeley. “They lose their capacity to borrow. All of that means that they can’t buy very much.”

The West reported the highest regional jobless rate for May: 10.1 percent. The last time any region had an unemployment rate of at least 10 percent was in September 1983, when the economy was emerging from a severe recession.

The region’s problems also go beyond housing. Cutbacks on business travel are hitting hard in Arizona and Nevada. In California, the jobless rate jumped to 11.5 percent last month. In Nevada, it rose to 11.3 percent, and in Oregon, to 12.4 percent. All three figures were records, based on documentation going back to 1976.

In Oregon, makers of plywood, window sashes and doors have suffered from reduced demand. The state also has lost jobs in high-tech industries and at factories that make heavy trucks and recreational vehicles.

The government report showed employment conditions deteriorating in 48 states and the District of Columbia last month. Michigan, the heart of the sinking auto industry, had the highest unemployment rate: 14.1 percent.

Nationwide, the jobless rate stands at a quarter-century high of 9.4 percent. Analysts say companies are unlikely to ramp up hiring until they feel sure their sales are rebounding and that any economic recovery will have staying power.

North Dakota and Nebraska reported the lowest unemployment rates: 4.4 percent each. North Dakota has been helped by the oil business. Nebraska has been supported by farm businesses.

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