Unemployment Fell in 24 U.S. States, Payrolls Rose in 35

Unemployment declined in 24 U.S. states in January and payrolls increased in 35, showing a strengthening labor market at the start of the year.

Joblessness decreased the most in Nevada, followed by Indiana, Michigan and South Carolina, figures from the Labor Department showed today in Washington. The states with the biggest gains in payrolls were Texas and Michigan.

The report is consistent with Feb. 4 figures showing U.S. unemployment in January fell to 9 percent as employers added 63,000 workers. The improvement continued into February when the jobless rate dropped to 8.9 percent and payrolls increased by 192,000, underscoring Federal Reserve Chairman Ben S. Bernanke’s testimony to Congress that there are “grounds for optimism” in the labor market.

Broad-based job gains have “staying power, power for lifting confidence and sustaining a view that will flow through to consumer spending,” said Jonathan Basile, an economist at Credit Suisse in New York.

Nevada’s jobless rate fell to 14.2 percent from 14.9 percent the previous month, today’s figures showed. Unemployment in Indiana dropped to 9.1 percent in January from 9.5 percent. Joblessness fell to 10.7 percent in Michigan and 10.5 percent in South Carolina.

Even with the decline, the jobless rate in Nevada was the highest in the country, followed by California at 12.4 percent and Florida at 11.9 percent, today’s report showed.

Unemployment in Colorado rose to 9.1 percent, the highest for that state since record-keeping began in 1976.

Texas Job Leader

Texas led states with the biggest payroll gains as employers added 44,100 workers. Michigan was second with an increase of 39,700. Payrolls in Ohio rose 31,900 and employment increased 24,500 in Illinois.

The national employment report showed payrolls rose by 63,000 in January, less than half the 152,000 gain a month earlier. Weather may have played a role in depressing job creation during the month.

Winter storms spread from the Midwest and the South to New England, covering 71 percent of the country with snow on Jan. 12, according to the National Climatic Data Center. Last month, the average temperature was 30 degrees Fahrenheit (minus 1.1 degrees Celsius), the coolest January since 1994 when the temperature averaged 28 degrees Fahrenheit.

“We do see some grounds for optimism about the job market over the next few quarters, including notable declines in the unemployment rate in December and January, a drop in new claims for unemployment insurance, and an improvement in firms’ hiring plans,” Bernanke told Congress March 1.

Federal Reserve

Central bank policy makers will likely keep interest rates near zero and maintain plans to buy $600 billion in Treasury securities by June to boost the pace of recovery until they see signs of sustained job creation.

Employment prospects for Americans are mixed. Lowe’s Cos., the second-biggest U.S. home-improvement retailer, is among companies trying to use its workforce more efficiently. The Mooresville, North Carolina-based chain said Jan. 25 it plans to cut 1,700 middle-management jobs and add 8,000 to 10,000 weekend sales positions to improve staffing during its busiest hours.

At the same time, the two largest U.S. automakers are expanding as sales pick up. Dearborn, Michigan-based Ford plans to hire more than 7,000 workers in the next two years. Larger rival General Motors Co. (GM), based in Detroit, will add a third shift and about 750 jobs to its assembly plant in Flint, Michigan.

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 reporter on this story: Alex Kowalski in Washington at akowalski13@bloomberg.net

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

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