Payrolls Drop in Majority of States

The Labor Department shed more light Tuesday on what happened to the jobs market in June, a month in which private sector jobs creation came in weaker than expected. We already knew—thanks to a Labor report from earlier this month—that the U.S. economy lost 125,000 jobs as the government scaled back its census staff, and that private employers added only 83,000 new positions. Earlier today, Labor released its state-by-state breakdown of the June figures, and they indicate that payrolls fell in a majority of states, even as the state unemployment rates dropped.

The jobs market is at the top of the national agenda. Millions of long-term unemployed workers are at risk of running out of unemployment benefits—which were on the cusp of being extended, once again, on Tuesday by a hard-fought vote in the Senate. Without government spending and hiring, the jobs market has been unable to generate momentum of its own.

The latest figures show that payrolls declined in 27 states in June, with the biggest decline in California, down 27,600 jobs. It was followed by New York (-22,500), Tennessee (-20,800), Arizona (-11,700), and New Mexico (-11,200).

The employment market in Texas showed the biggest gain, creating 14,000 new jobs. It was followed by Kentucky (+6,200), Arkansas (+6,000), Louisiana (+5,800), and North Carolina (+5,100).

The reason for the job losses varied from state to state. California was hit hard by the loss of government jobs, while New York suffered a setback in industries such as finance. (A complete state-by-state breakdown of the numbers can be found here, at Buffalo Business First.)

While the jobless rate fell at the national level in June, to 9.5 percent from 9.7 percent, the picture varied across the U.S. The unemployment rate fell in 39 states.

Nevada. which already had the highest jobless rate in the country, just got worse, rising to 14.2 percent from 14 percent. Michigan, number two, eased a bit, as the unemployment rate fell to 13.2 percent from 13.6 percent. North Dakota had the lowest unemployment rate at 3.6 percent.

The key figures are payrolls, though. It's encouraging that the unemployment rate is falling, but that number is shaped by factors such as the size of the labor market. What matters the most is the number of people going to work. The economy needs to create 100,000 jobs just to keep up with population growth, and it needs to generate about 200,000 jobs a month to replace in a reasonable amount of time the 8 million jobs lost during the recession. It looks as if that won't happen any time soon.