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States Losing Jobs Almost Equal to Those Gaining, Showing Labor Weakness

Photographer: Win McNamee/Getty Images

Cutbacks in employment are expected as state and local governments try to cope with budget restraints. Close

Cutbacks in employment are expected as state and local governments try to cope with budget restraints.

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Photographer: Win McNamee/Getty Images

Cutbacks in employment are expected as state and local governments try to cope with budget restraints.

Payrolls dropped in 24 U.S. states in June and climbed in 26, indicating the labor market is struggling across much of the world’s largest economy.

Tennessee led the nation with a 16,900 decrease in payrolls, followed by Missouri with a 15,700 drop, figures from the Labor Department showed today in Washington. Texas and California had the biggest employment gains. The jobless rate rose in 28 states.

The report is consistent with nationwide figures released July 8 that showed employers added 18,000 workers in June, the fewest in nine months, and unemployment rose to 9.2 percent, the third straight monthly gain. Hiring needs to accelerate to ensure consumers keep spending, which accounts for about 70 percent of the economy.

“We’re yet to see broad-based gains across the U.S,” Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, said before the report. “We’re in a job market that’s still far from normal or healthy,”

Virginia and North Carolina rounded out four states with the biggest job losses last month, the report showed.

Payrolls increased by 32,000 in Texas and by 28,800 in California. Michigan and Minnesota were also among the biggest job gainers.

The jobless rate jumped by 0.5 percentage point in South Carolina, the biggest single-month increase, to 10.5 percent. Unemployment climbed by 0.3 point in Alabama, Arkansas and Illinois.

Unemployment in Nevada

Nevada continued to hold the highest jobless rate in the nation at 12.4 percent. Nonetheless, the rate was down 2.5 percentage points from June 2010, the biggest decrease over the past year. California had the second-highest jobless rate at 11.8 percent.

North Dakota had the lowest unemployment in the nation, holding at 3.2 percent rate in June.

Federal Reserve Chairman Ben S. Bernanke told Congress last week that the central bank is prepared to take additional steps, including buying more government bonds, if the economy appears to be at risk of stalling. Even so, he said policy makers aren’t yet ready to embark on a third round of asset purchases.

Some companies are still slashing jobs. Lockheed Martin Corp., the world’s largest defense contractor, on July 19 said it’s offering a voluntary separation plan to 6,500 employees. The workers represent all of Bethesda, Maryland-based Lockheed’s salaried U.S. corporate staff. Also this week, Goldman Sachs Group Inc. said it expects to cut headcount by about 1,000 globally, and Cisco Systems Inc. said it plans to shed about 6,500 jobs, or 9 percent of its full-time workforce.

New York, New Jersey

New York state’s unemployment rate rose to 8 percent in June from 7.8 percent in the prior month, even as it gained 8,900 jobs. In New York City, the jobless rate increased to 8.7 percent from 8.6 percent.

New Jersey’s unemployment rate climbed to 9.5 percent last month from 9.4 percent, according to the report.

Cutbacks in employment are expected as state and local governments try to cope with budget restraints.

In Alabama, Jefferson County commissioners were to meet yesterday with lawyers to discuss bankruptcy, according to a county staff member with direct knowledge of the talks. The county, home to Birmingham, the state’s largest city, has spent more than three years in fiscal distress after a $3 billion sewer-bond refinancing collapsed during the credit crisis.

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: Shobhana Chandra in Washington schandra1@bloomberg.net

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

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