Unemployment hits 98 percent of metro areas

February 5, 2009 7:20:25 AM PST
Metropolitan areas across the Southeast and Midwest are seeing some of the steepest increases in joblessness, stung by their dependence on factories serving the struggling housing and auto sectors. That is one of the key trends that emerges from a Labor Department report released Wednesday showing December unemployment rates rose in 98 percent of the country's largest metropolitan areas, compared with a year earlier.

More than 100,000 job cuts have been announced since then by a wide range of industries, sparing few communities. The government's next monthly snapshot of nationwide unemployment is expected to show the January rate climbed to a 17-year high.

"It used to be they'd at least take your application. They don't even do that any more," said Heather Allen of Elkhart, Ind., an area that had the biggest annual gain in its unemployment rate. "Places just aren't hiring."

The recession, now in its second year, was caused by the housing, credit and financial crises. To survive, companies are eliminating jobs and cutting or freezing pay, among other cost-saving measures. Layoffs were announced Wednesday by Botox maker Allergan Inc. and Time Warner Cable Inc., which cut a combined 1,700 workers.

"Industries that at first appeared to be immune to downturns, such as computer and pharmaceutical, are now rapidly shedding workers," said John Challenger, chief of Challenger, Gray & Christmas, a placement firm.

President Barack Obama and Congress are negotiating a nearly $900 billion package of tax cuts and government spending intended to pump-up consumer spending and create jobs. Even if it is quickly enacted, unemployment will keep rising and the country as a whole probably will lose up to 3 million jobs this year, economists predict.

"Unfortunately, there is no light at the end of the tunnel yet," Challenger said.

Jobless rates climbed in 363 of 369 large metropolitan areas in December, compared with the prior year, according to Wednesday's Labor Department report.

Indiana's Elkhart-Goshen region saw its unemployment rate soar to 15.3 percent in December, up a whopping 10.6 percentage points from December 2007. The region has been bruised by layoffs in the recreational vehicle industry. Hundreds of workers have lost their jobs at RV makers such as Monaco Coach Corp., Keystone RV Co. and Pilgrim International.

Allen, a 35-year-old mother of two, said she began looking for a job in September when her husband's hours at Monaco Coach were cut sharply - including some weeks where he's told not to show up for work. Prospects are dim.

"We've done some diversification over the years, but not enough to offset what has happened in the RV industry," said Elkhart County Commissioner Terry Rodino.

Dalton, Ga. - home to many flooring manufacturers and nicknamed the carpet capital of the world - racked up the second-largest increase.

The region's unemployment rate jumped to 11.2 percent, up 6.2 percentage points from a year earlier, as fallout from the housing market's collapse has cut demand for carpets and other household goods.

Danville, Va., which saw its jobless rate bolt to 11.5 percent, had the third-biggest increase of 5.6 percentage points. The area's economy once relied primarily on the tobacco and textile industries and has not yet recovered, interim City Manager M. Lyle Lacy III said Wednesday.

Rocky Mount, N.C., and Rockford, Ill., tied for the fourth-largest gain.

The nationwide unemployment rate climbed to 7.2 percent in December. Government data to be released Friday are expected to show the rate rose to a seasonally adjusted 7.5 percent in January - a 17-year peak.

The number of people collecting jobless benefits also is climbing to record highs. A Thursday report is expected to show the country's jobless benefits rolls hitting 4.8 million.

Many of the highest jobless rates were concentrated in California, which got walloped after the booming housing market went bust. The state also has one of the highest home foreclosure rates in the country.

El Centro, Calif., continued to lay claim to the nation's highest unemployment rate - 22.6 percent. The jobless rate is notoriously high in the area, where many unemployed are seasonal agriculture workers, including some who live in Mexico.

Among the few bright spots in the government unemployment report were the metro areas that include Morgantown, W.Va., - home of West Virginia University - and Logan, which straddles Utah and Idaho. They registered unemployment rates of 2.7 percent and 2.8 percent, respectively.

The metropolitan area unemployment figures aren't seasonally adjusted.


On the Net:

Labor Department report: http://www.bls.gov/news.release/metro.nr0.htm


Associated Press Writers Tom Coyne in South Bend, Ind., Dionne Walker in Atlanta, Sue Lindsey in Roanoke, Va., and Elliot Spagat in San Diego contributed to this report.

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