It has been reported that payrolls have decreased in 30 states while the jobless rate climbed in 26. Numbers like this show that the jobless rate is not limited to any certain area, but the nation as a whole. This economy needs to generate more jobs for income growth if it wants to see any type of progress.
By Bob Willis and Shobhana Chandra
Sep 16, 2011 7:36 AM MT
Payrolls fell in 30 U.S. states in August, led by New York and Georgia, while the jobless rate increased in 26, showing the slump in hiring is broad-based.
Employers cut staff by 22,700 workers in New York last month, and by 18,200 in Georgia, figures from the Labor Department showed today in Washington. Nevada continued to lead the nation in unemployment with a rate of 13.4, up from 12.9 percent in July.
The economy needs to generate more jobs to spur income growth after consumer spending stagnated in the second quarter, raising concerns of another recession. A Labor Department report on Sept. 2 showed employers added no workers to payrolls last month, the weakest reading since September 2010, and the jobless rate held at 9.1 percent.
“Consumers and businesses have turned very cautious,” John Herrmann, a senior fixed-income strategist at State Street Global Markets in Boston, said before the report. “The recent spate of layoff announcements suggest that there could be deeper cuts to payrolls toward year-end, impacting holiday spending.”
The biggest job gains last month occurred in Minnesota, where employers boosted payrolls by 28,400, when the end of a partial shutdown of the state’s government returned about 23,000 workers to their jobs. Employment in North Carolina climbed by 16,500 workers and increased in Arizona by 15,400.
Payrolls in Texas fell by 1,300 workers, the first decrease in almost a year. Over the past 12 months, 44 states gained jobs, while six showed a decline.
With payroll growth faltering, employment prospects for Americans have weakened compared with earlier in the year. Employers added 35,000 workers a month on average from June through August. That compared with 155,000 a month on average in the prior three-month period, a rate economists such as Chris Rupkey at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York say is roughly in line with stable unemployment.
Political squabbling over the budget and mounting fear of a default in Europe caused the Standard & Poor’s 500 Index to plummet 17 percent from July 22 to Aug. 8, prompting companies and consumers to cut back. Slowing job growth is adding to pressure on Federal Reserve Chairman Ben S. Bernanke and President Barack Obama to rouse an economy that’s at risk of stalling two years after the last recession ended.
Obama this week sent a $447 billion job-growth package to Congress that would include tax cuts for workers and employers, hiring incentives for small businesses, more money for infrastructure spending and aid to state and local governments to stem layoffs of educators.
Banks have been among companies announcing the biggest dismissals. Bank of America Corp. (BAC), the biggest U.S. lender by assets, will eliminate 30,000 jobs in the next few years as part of Chief Executive Officer Brian T. Moynihan’s plan to bolster profit and the company’s stock. Bank of America announced the job cuts in a statement last week.
“We don’t have to be the biggest company out there, we have to be the best,” Moynihan said at a New York investor conference. “We can get out of things we don’t need to do, make the company leaner, more straightforward, more driven.”
Citigroup Inc. (C), the third-biggest U.S. bank, will limit hiring to only “critical” jobs as the economic slowdown continues and revenue slumps, the company said this week.
State and local employment data are derived independently from the national statistics, which are typically released on the first Friday of every month. The state figures are subject to larger sampling errors because they come from smaller surveys, making the national figures more reliable, according to the government’s Bureau of Labor Statistics.
To contact the reporters on this story: Bob Willis in Washington at email@example.com; Shobhana Chandra in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Christopher Wellisz at email@example.com
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