Employment Increased in 42 U.S. States in February, Led by Texas

Payrolls grew in 42 U.S. states in February and the unemployment rate fell in 22, showing the labor market improved in a broad swath of the world’s largest economy.

Texas led with an 80,600 hiring increase, the biggest in data going back to 1982, followed by California with 41,200, according to figures from the Labor Department today in Washington. Rhode Island, Vermont, California and New Jersey showed the biggest declines in unemployment rates.

Employers hired 236,000 workers in February, almost twice the 119,000 increase a month earlier, figures from the Labor Department showed earlier this month. The figures help explain why consumer spending, which accounts for about 70 percent of the economy, has been holding up in the face of a two percentage-point increase in the payroll tax.

“Labor market conditions continue to improve,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “The consumer has shown a lot of resilience.” Price is the top forecaster of employment for the past two years, according to data compiled by Bloomberg.

Connecticut and Nevada showed the biggest declines in employment last month, the report showed.

Even as the jump in employment pushed California’s jobless rate down to 9.6 percent, it still tied Mississippi and Nevada as the highest in the nation.

North Dakota’s rate remained the lowest, at 3.3 percent.

Two states, Illinois and Wisconsin, showed statistically significant increases in the unemployment rate, the report said.

Unemployment Falls

Nationally, the unemployment rate fell to 7.7 percent in February, a four-year low, from 7.9 percent in the prior month, a Labor Department report showed earlier this month. The February state data are due on April 19.

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.

Federal Reserve officials have said they are waiting for “substantial” gains in the labor market before they put the brakes on monthly purchases of $85 billion in Treasuries and mortgage-backed securities.

Fed Chairman Ben S. Bernanke said last week the central bank would alter monthly buying in response to gains in the job market, underscoring a need for flexibility. He said further gains would be needed to be sure “this is not a temporary improvement.”

To contact the reporters on this story: Michelle Jamrisko in Washington mjamrisko@bloomberg.net

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

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