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Payrolls Fall in 27 U.S. States, Led by California

Payrolls decreased in 27 U.S. states in June, led by California and New York, signaling the slowdown in hiring is broad-based.

Employers in California cut staff by 27,600 workers last month and those in New York reduced employment by 22,500, the Labor Department said today in Washington. Tennessee, Arizona and New Mexico rounded out the five states with the biggest job losses.

The U.S. lost 125,000 jobs last month as the government cut temporary workers conducting the 2010 census and private payrolls rose a less-than-forecast 83,000, according to Labor Department figures issued July 2. The data signal companies are becoming reticent to hire as the economy cools.

“Businesses are looking at what’s going on in Europe and the stock outlook and people are becoming a little more skittish,” Marisa Di Natale, a director at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “We may see that for a couple of more months until we start to see some real momentum in some sector of the economy.”

Of the top five, declines in government payrolls accounted for more than the entire loss of jobs in California and Arizona last month, today’s report showed. Excluding government agencies, employment would still have dropped in New York, Tennessee and New Mexico. New York employers cut payrolls in a broad range of industries, including finance, manufacturing, and education and health services.

Record in Nevada

For the second month, Nevada had the highest jobless rate in the country, rising to a record 14.2 percent from 14 percent in May. Data collection began in 1976. Unemployment in Michigan, the second-highest, dropped to 13.2 percent from 13.6 percent.

Thirty-nine states showed a decrease in joblessness, paced by a half percentage-point drop in New Hampshire. In addition to Nevada, unemployment also rose by 0.2 percentage point in Louisiana, to 7 percent.

Texas, with a gain of 14,000, and Kentucky, with a 6,200 increase, paced states showing an improvement in employment. The leisure and hospitality industry and retail and wholesale trade and transportation were the areas with the biggest increases. Government agencies cut 213,000 workers from payrolls, in part reflecting the drop in census workers.

New York City’s seasonally adjusted unemployment rate fell for the sixth straight month, to 9.5 percent from 9.6 percent, the state Labor Department said July 15. The state’s rate dropped 0.1 point to 8.2 percent, the lowest since April 2009.

New York, New Jersey

New Jersey’s jobless rate fell to 9.6 percent, an 11-month low, although overall hiring contracted “marginally,” the state Labor Department said July 14. Nonfarm employment dropped by 1,900 to 3.87 million, the department said.

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.

Today’s report showed 16 states had unemployment of 10 percent or higher, the same as in May.

State and local governments are facing mounting budget deficits that in turn are forcing some municipalities to make their own staff reductions. New York City said on July 19 that it plans to cut about 3,000 “back-office” jobs through attrition in order to consolidate operations.

Budget Turmoil

Job cuts among state and local entities may deepen this year if they don’t receive the federal funding some governments estimated they’d get in their budgets for this fiscal year, Di Natale said.

“At least some of the budgets that were balanced included the assumption of getting more funding for Medicare and Medicaid and it’s looking like they may not,” Di Natale said. “So with some of these budgets there could be significant problems once it’s clear they won’t be getting the kind of help they thought they would.”

Illinois Governor Pat Quinn last week doubled to 24 the number of unpaid furlough days for 2,700 managers and staff members this fiscal year as he tries to close a budget deficit of about $10 billion. The unpaid days off for non-unionized workers amount to a 9.2 percent cut in compensation, and will save $18 million in the state’s budget, Quinn said in a press release July 16.

-- With assistance from Mark Schoifet in New York. Editor: Carlos Torres

To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net

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