Employment Decreased in Majority of U.S. States in January

Payrolls decreased in 27 U.S. states in January, showing a slowdown in job growth extended throughout much of the country.

California led the nation with a 31,500 drop in payrolls for the month, followed by Illinois with a loss of 27,600 jobs, figures from the Labor Department showed today in Washington. At the same time, the unemployment rate fell throughout the country as 43 states posted decreases.

A report from the Labor Department this month showed hiring accelerated in February as the world’s largest economy began to emerge from the winter chill that had curbed growth earlier in the year. Federal Reserve policy makers, who meet in in Washington this week, are projected to trim their monthly bond buying to $55 billion from $65 billion with the employment situation on the mend.

“I am not all that concerned about the drop of jobs in January,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “The losses appear to be in government and retail trade. Government may be due to the timing of the winter holidays and possible snow days. The cutbacks in retailing likely reflect larger than usual layoffs following a disappointing holiday-shopping season.”

State and local employment data are derived independently from the national statistics, which are usually 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.

Job Losses

The number of states losing jobs in January was up from 16 in December and was the most since July 2012, according to Bloomberg calculations. The combined state figures, the ones subject to bigger sampling errors, showed total payrolls dropped by 77,000 in the first month of the year, the worst reading since September 2010.

Payrolls picked up in February following a December and January slowdown, which many economists have attributed to unusually harsh winter weather. That means growth in state payrolls may be poised for a rebound in the next report. The U.S. added 175,000 jobs in February, a report showed, following gains of 129,000 in January and 84,000 in December.

The U.S. jobless rate edged up to 6.7 percent in February from a more than five-year low of 6.6 percent in January as the pace of hiring failed to keep up with the number of people entering the workforce, the Labor Department said.

Unemployment Declines

Today’s figures showed Louisiana, Michigan and Tennessee were among the states with biggest declines in joblessness. The unemployment rate in Rhode Island, at 9.2 percent in January, was the highest in the country. North Dakota at 2.6 percent had the lowest.

Texas led the 23 states that showed payroll increases in January, showing a 33,900 advance. Ohio was second with a 16,700 gain.

Hiring may get a boost as demand strengthens across the country. Retail sales increased in February for the first time in three months, advancing 0.3 percent following a 0.6 percent drop in January that was larger than initially reported, the Commerce Department in Washington said last week.

Higher home prices and strong equity returns may be giving consumers the means to spend, having helped pushed household wealth up by $2.95 trillion in the fourth quarter to a record $80.7 trillion, according to data from the Fed. Cleveland, Ohio-based paint purveyor Sherwin Williams Co. is among those benefitting from increased buying of home improvement products.

“We’re very optimistic that it’s just going to be a strong demand year for us,” said Chief Executive Officer Christopher M. Connor, speaking in a March 12 presentation. Paint contractors are “as busy as they have been in years. They’re booked up for the season. They’re trying to hire painters.”

To contact the reporter on this story: Jeanna Smialek in Washington at jsmialek1@bloomberg.net

To contact the editor responsible for this story: Carlos Torres at ctorres2@bloomberg.net

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