Unemployment rates rose in majority of US states

[July 23, 2011]  WASHINGTON (AP) -- Unemployment rates rose in more than half of U.S. states in June, evidence that slower hiring is affecting many parts of the country.

The Labor Department said Friday that unemployment rates in 28 states and Washington, D.C., increased last month. Rates declined in eight states and were flat in 14. That's a change from May, when 24 states reported falling unemployment rates.

Twenty-six states reported a net gain in jobs in June, while 24 states lost jobs.

The changing trend in state unemployment rates reflects a weaker economy hampered by high gas prices and lower factory output. Nationally, employers added only 18,000 net jobs in June, the second straight month of feeble hiring. The U.S. unemployment rate ticked up to 9.2 percent.

The economy expanded only 1.9 percent in the January-March period, and most economists expect similar growth in the April-June quarter. The government releases its first estimate for second-quarter growth on July 29.

Nevada had the highest unemployment rate among the states for the 13th straight month. It rose in June to 12.4 percent, up from 12.1 percent in May. The state has been hampered by foreclosures, depressed home sales and a decline in tourism.

It was followed by California (11.8 percent) and Rhode Island (10.8 percent).

North Dakota reported the lowest unemployment rate, at 3.2 percent. Booming oil, agriculture and manufacturing industries have helped the state keep the nation's lowest unemployment rate since November 2008.

It was followed by Nebraska (4.1 percent) and South Dakota (4.8 percent).

Some companies are cutting their work forces. Layoffs rose to their highest level in nine months in May, according to a separate Labor Department report last week.

Tennessee, Missouri and Virginia reported the biggest job losses. Tennessee said 16,900 jobs were cut last month, led by steep losses in state and local government. Missouri suffered its biggest losses in education and health services.

Those states were also affected by harsh weather this spring, which may have led to some job losses.

Tennessee was swept by flooding, high winds, hail and tornadoes in June, which washed out bridges, downed power lines and temporarily closed a sewer treatment facility and a local airport.

A May 22 tornado in Joplin, Mo., killed 159 people, destroyed more than 7,000 homes and displaced 5,000 workers in a city of just 50,000. The area reported 9,400 jobs were lost in June.

The impasse in Washington over raising the federal government's borrowing limit could affect several states, including Tennessee and Virginia. Those states could see a downgrade to their credit rating if the U.S. defaults on its debt, according to Moody's Investors Services.

The government reached its $14.3 trillion borrowing limit in May. The Treasury Department has said it will default on its debt if the limit is not raised by Aug. 2.

Virginia is closely tied to the federal government because of its large number of military bases, defense contractors and government employees. A downgrade to a state's rating would mean it would pay higher interest rates to borrow money.

Analysts are expecting another weak month of hiring in July, based on recent data.

The economy needs to generate about 125,000 jobs per month to keep up with population growth and prevent the unemployment rate from rising. It needs at least twice that many to rapidly reduce unemployment.

[Associated Press; By DEREK KRAVITZ]

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.