Payrolls Decrease in 35 U.S. States, Led by New York

Payrolls decreased in 35 U.S. states in December, while the unemployment rate rose in 20, showing the labor market recovery is slow to gather momentum.

New York led the nation with 22,800 job cuts last month, followed by Minnesota with 22,400 firings, and Florida with 17,900, figures from the Labor Department showed today in Washington.

The report is consistent with figures on Jan. 7 that showed a fewer-than-forecast 103,000 jobs were created nationwide last month even as unemployment fell. Federal Reserve policy makers meeting today and tomorrow are likely to reiterate a pledge to buy $600 billion in government securities through June to help lower unemployment and spur growth.

“This kind of mixed picture, combined with some of the positives we’ve seen in retail sales and manufacturing data, rising credit, tells us we’re at a turning point,” said Steven Cochrane, director of regional economics at Moody’s Analytics Inc. in West Chester, Pennsylvania.

Other reports today showed consumer confidence rose more than forecast in January as Americans gained optimism over the outlook for jobs, while residential real-estate prices dropped in November by the most in a year.

Confidence, Home Prices

The Conference Board’s sentiment index increased to 60.6 this month, the highest level since May, from 53.3 the prior month, figures from the New York-based private research group showed. The S&P/Case-Shiller index of home values in 20 cities fell 1.6 percent from November the prior year, the biggest 12- month decrease since December 2009, the group said.

Joblessness increased most in West Virginia, where it rose by 0.3 percentage point, followed by Colorado, Georgia and Nevada, which showed increases of 0.2 percentage point each. Nevada also faced the highest jobless rate in the country at 14.5 percent.

After Nevada, the jobless rate was highest in California at 12.5 percent and Florida at 12 percent, today’s report showed.

Michigan, which is part of the so-called manufacturing Rust Belt, saw unemployment plunge by 0.7 percentage point, the biggest one-month decrease since records began in 1976 as about 37,000 people left the labor force. The jobless rate fell to 11.7 percent, the lowest level since January 2009.

Automakers Hiring

The state, home to the nation’s biggest automakers, is seeing signs the industry is turning around. General Motors Co., the largest U.S. automaker, will add a third shift and about 750 jobs to its assembly plant in Flint, Michigan, to meet rising demand for pickups, Detroit-based GM said yesterday in a statement.

“Adding a third shift is a response to customer demand for heavy-duty pickups, which most people use to tow, haul and plow,” Mark Reuss, president of GM North America, said in the statement. “Equally importantly, it brings jobs and a needed economic boost to the Flint area.”

Unemployment in North Dakota, the lowest in the U.S., was 3.8 percent.

The Labor Department’s national report for December showed private payrolls, which exclude government agencies, rose by 113,000 last month after a 79,000 November gain.

For all of 2010, about 1.1 million jobs were created, the most since 2006. The economy lost 8.4 million jobs during the recession that began in December 2007 and ended in June 2009.

Bernanke’s View

At the pace of improvement projected by Fed officials, “it could take four to five more years for the job market to normalize fully,” Feb Chairman Ben S. Bernanke said Jan. 7 in testimony to the Senate Budget Committee after the jobs report.

The workforce, those with jobs or looking for work, shrank by 260,000 workers last month, sending the share of the population in the labor force down to a 26-year low of 64.3 percent, the Labor Department’s national report showed Jan. 7.

Unemployment stuck above 9 percent is one reason why President Barack Obama last month signed an $858 billion bill extending all Bush-era tax cuts for two years. The bill also continues expanded unemployment insurance benefits through 2011 and cuts payrolls taxes by 2 percentage points.

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 Texas led states with the biggest payroll gains as employers added 20,000 workers. South Carolina was second with an increase of 9,000.

To contact the reporters on this story: Bob Willis in Washington at bwillis@bloomberg.net;

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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