Payrolls Climb in 31 States, Led by New York, Texas; Nevada Is at Bottom
Payrolls climbed in 31 U.S. states in July, led by New York and Texas, while the jobless rate increased in 28, painting a mixed employment picture the month before global stock markets slumped.
Employers in New York boosted staff by 29,400 workers, while those in Texas added 29,300, figures from the Labor Department showed today in Washington. Joblessness increased by 0.4 percentage point in Illinois, Michigan, Minnesota and South Carolina. Nevada continued to lead the nation in unemployment with a rate of 12.9 percent.
Widespread job growth is needed to shore up incomes after spending among consumers ground to a halt in the second quarter, raising concern the world’s largest economy was stalling. A Labor Department report on Aug. 5 showed employers added 117,000 workers to payrolls last month and the jobless rate fell to 9.1 percent.
“The overall labor market was doing better than previous months but the bigger point is that it’s a lot weaker than earlier in the year,” Paul Dales, senior U.S. economist at Capital Economics Ltd. In Toronto, said before the report. “That’s a concern given that any data from July won’t reflect the market turmoil in the last couple of weeks that really could have prompted some businesses to postpone or cancel any hiring plans.”
Stocks dropped, extending the fourth straight weekly slump for the Standard & Poor’s 500 Index. The gauge fell 1.5 percent to 1,123.53 at the 4 p.m. close in New York. Treasury securities were little changed.
After Nevada, the jobless rate was highest in California at 12 percent and Michigan and South Carolina, both at 10.9 percent.
Michigan and Tennessee rounded out the top four states showing the biggest increases in payrolls with gains of 23,000 and 14,300, respectively.
Over the past 12 months, six states lost jobs, including Indiana, Nevada, Kansas, Alabama, Georgia and Delaware.
The jobless rate in North Dakota, the lowest in U.S., increased to 3.3 percent from 3.2 percent in June.
Smaller Job Gains
While payroll growth picked up in July, employment prospects for Americans have dimmed compared with earlier in the year. Employers added 216,000 workers from May to July, compared with 646,000 in the prior three month period.
“Indicators suggest a deterioration in overall labor market conditions in recent months,” the Federal Open Market Committee said in a statement on Aug. 9. “The unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate” of maximum employment and price stability.
With an economy that’s growing “considerably slower” than expected, the Federal Reserve policy makers pledged for the first time to keep the benchmark interest rate at a record low at least through mid-2013.
The risk of a recession has risen to 30 percent from 14 percent in July, according to the median of the 39 economists in a Bloomberg News survey. A 14 percent drop in the Standard & Poor’s 500 Index since the beginning of July through yesterday, government fiscal austerity and a lack of jobs will hurt U.S. growth, which slowed to a 0.9 percent pace in the first half of 2011, the economists said.
Banks have been among companies announcing they will cut jobs in coming weeks. Bank of America Corp. Chief Executive Officer Brian T. Moynihan told managers at the biggest U.S. lender in a memo yesterday to expect 3,500 job cuts this quarter. Some employees have already been informed of the firings, which are in addition to 2,500 reductions made this year, Moynihan 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.
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