US Unemployment Rates - April 2009

The April US regional and state unemployment figures were recently released. The figures, overall, seem to have stabilized somewhat, even though the national unemployment rate increased by nearly one-half of one percent. Almost one-half of the states had their unemployment rates improve, while the number of states with double-digit unemployment rates remained steady, at eight. Here are some of the highlights:

• Overall, the "official" national unemployment rate (U-3) increased by 0.4%, from 8.5% to 8.9% over March's number. For the past twelve months, the national rate has increased by 3.9%.
  
• For the most inclusive unemployment rate measured (U-6), the increase was 0.2%, from 15.6% to 15.8%. For the past twelve months, U-6 has increased by 6.6%. (If there is one bit of good news with respect to U-6, it is that the spread between U-3 and U-6 decreased slightly, from 7.1% in March to 6.9% in April. This is the first time since March 2008 that this particular number has decreased.)
  
• In terms of a monthly change, the state with the largest increase was West Virginia, with an increase of 0.7%. Ohio and Rhode Island tied for the second largest increase, at 0.5%, while Connecticut, Illinois, Louisiana and Puerto Rico all had a 0.4% increase.
  
• A total of twenty-one states had their monthly unemployment rates go down in April, with an additional eleven remaining unchanged. The previous month, only two states had their unemployment rates go down with three remaining unchanged.
  
• On an annual basis, four states have increases over 5.0%: Oregon at 6.4% (down 0.2%), South Carolina at 5.3% (down 0.2%), North Carolina at 5.1% (down 0.4%), and Michigan at 5.0% (unchanged).
  
• The states with the lowest annual increases are North Dakota at 1.0%, Iowa and Nebraska at 1.1%, Alaska at 1.4%, and Arkansas at 1.6%.
  
• A total of eight states have double-digit unemployment rates, unchanged from March (and not counting Puerto Rico, which has an unemployment rate of 15.4%). The state with the highest unemployment rate is Michigan (once more), at 12.9%, up 0.3%. Oregon comes in second with a rate of 12.0% (up 0.1%), and South Carolina places third with a rate of 11.5% (up 0.1%). In fourth place is Rhode Island with a rate of 11.1% (up 0.5%). In fifth place is California at 11.0% (down 0.2%); in sixth is North Carolina at 10.8% (unchanged), and in seventh is Nevada at 10.6% (up 0.2%). The newest state in the ranks of the double-digit unemployment rates is Ohio, at 10.2%, up 0.5%. Indiana, which had been among the double-digit states last month, dropped down 0.1% to 9.9%.
  
• The states with the lowest unemployment rates are North Dakota (4.0%, down 0.2%), Nebraska (4.4%, down 0.3%), Wyoming (4.5%, unchanged), South Dakota (4.8%, down 0.1%), Iowa (5.1%, down 0.1%) and Utah (5.2%, unchanged).
  
• In terms of non-farm payroll employment (i.e., number of jobs), the states with the biggest decreases since March are California (-63,700), Texas (-39,500), and Michigan (-38,400).
  
• For annual changes in non-farm payroll employment, the states with the biggest decreases are California (-706,700), Florida (-380,300), Michigan (-284,800), Ohio (-262,600) and Illinois (-255,400).

The PDF version of the Bureau of Labor Statistics press release can be found here.

Is the Recession Over? Flip a Coin.

James Hamilton at Econbrowser has been looking over initial claims for unemployment insurance the past few weeks. His most recent post suggests a 50% chance that the recession may end by June. Remember that unemployment is a lagging economic indicator so that, if we really are nearing the end of the recession, then this decrease in initial unemployment insurance claims is a very good sign. On the other hand, as Dr. Hamilton points out, there's still a very good chance (50% historically) that unemployment claims could go back up again, something that's readily apparent in the first graph in my post back in February on US unemployment levels.

The Labor Department reported today that initial claims for unemployment insurance fell by 14,000 during the most recent available week. That brings the 4-week average down for the third consecutive week and puts it 3.3% below the peak reached April 9.

Black line: seasonally adjusted new claims for unemployment insurance, weekly since January. Blue line: average of 4 most recent weeks as of each date.


That ongoing drop in the 4-week average is noteworthy because in each of the last 5 recessions, once the new claims number began declining from its peak value reached during the recession, the NBER subsequently dated the recovery from that recession as beginning within 8 weeks.

...

If we leave out the 1970 recession, there are 230 weeks in which the NBER declared the economy to have been in recession during the 5 recessions of 1974, 1980, 1982, 1990, and 2001. In 22 of these weeks, we saw as big a drop as we've seen this month, namely, the 4-week average dropped by more than 3.3% over a 3-week period. Of these 22 favorable readings, 11 turned out to be part of the final move out of recession, while in the other 11, new claims turned back up to reach a subsequent higher peak. Thus, if all you had to go on was the data on new unemployment claims and its behavior in previous recessions, you might conclude that there's a 50% chance that an economic recovery will have started by the beginning of June.

For some other possible signs of "green shoots," check out Bonddad's post on inventory levels in the 1Q09 GDP report.