What Do State Unemployment Rates Show About the U.S. Economy?

Facts from the October BLS report on state unemployment rates, ranked from lowest to highest:

1. Five states have unemployment rates at 3.6% or less (SD, WY, ND, UT, and NE).
2. 33 states have unemployment rates below the national average of 6.5%, 15 states are above 6.5%, and two states are at 6.5%.
3. The median unemployment rate by state is 5.7%, with 25 states at or below 5.7% and 25 states at or above 5.7%, and mean by state is 5.86%.
4. Based on #2 and #3 above, it suggests that the reason the national average of 6.5% is above the median of 5.7% is either because: a) the states with higher-than-average unemployment rates are also states with higher-than-average population, and/or b) there are more extreme "outliers" above the median than extreme outliers below the mean, bringing the mean of 6.5% above the median of 5.7%.

I believe both of these are correct: Some of the states with the highest jobless rates are also states that have large populations (MI at 9.3%, CA at 8.2%, OH at 7.3% and, IL at 7.3%). Moreover, the two states with the highest rates are Michigan and RI with 9.3% rates, 3.6% above the median, while the two states with the lowest rates are SD and WY with 3.3%, or only 2.4% below the median.

Bottom Line: The economic problems and labor market weakness are not necessarily distributed equally around the country, but the biggest problems are perhaps somewhat concentrated in some of the states with the largest populations. Fourteen states have unemployment rates below 5% for example, which would normally considered to be pretty far from recessionary levels.

Comments

[Steven Hansen:]

Mark, you are correct that unemployment by state is still a few percent away from recessionary levels. and looking at the unemployment data from past recessions, it is apparent that each state is effected to varying degrees and out of phase with each other.

unfortunately, we will be at recessionary unemployment levels within a few months. unlike past recessions, this one started on wall street, and the dominos started falling from there. this recession, excess production capacity was not the first bubble to break.

2008 Nov 24 04:35 AM

[john s. gordon:]

unemployment concentrated in states where our manufacturing economy has gone to china etc.

not too surprising.

anybody here still in favor of free trade?
> jack

2008 Nov 24 08:24 AM

[Paul Killinger:]

Mark,

Almost without exception, the states with the lowest unemployment rates (and the healthiest balance sheets) share one trait in common. They are NET ENERGY EXPORTERS.

The question now becomes with the price of these fuels (primarily oil, gas and coal) falling in this deflationary environment, how long this will last?

2008 Nov 24 10:23 AM

[Paul Killinger:]

Jack,

You only need read the history of the Great Depression to understand why artificially limiting free trade would be a monumental disaster for our nation's economy. And if that were true then, just think what it would do now.

Our last four presidents were all free traders, and our economy grew at a greater rate during their tenure than at any other time in our history. Besides, trading had little or nothing to do with our present economic quagmire.

2008 Nov 24 10:32 AM

[Paul Killinger:]

(Other than the worthless paper we invented and sold to other nations, that is.)

2008 Nov 24 10:34 AM

[CLH:]

Something not mentioned. Those states with the lowest unemployment have "right to work" laws. One of main causes of unemployment are unions. No one should have to pay union dues in order to get a job.

Also minimum wage laws must be eliminated. They also cause unemployment during difficult times. If an owner cant make a profit with a worker, they will not be hired. Instead the job is sent overseas.

What does this all boil down to? The Democrats are the main cause of unemployment.

2008 Nov 24 04:21 PM

[Paul Killinger:]

CLH,

Sadly, all true. The (union oriented) media dismisses all the hundreds of thousands of successful auto jobs in the U.S. that are NON-union. They're not going anywhere. It really is past time for Detroit to wake up and smell the roses.

2008 Nov 24 11:03 PM

[Paul Killinger:]

The D's and their union brothers are going ot get their chance now. We'll see how they do. My hope is there's enough of America left when they're done to pick up the pieces.

2008 Nov 24 11:06 PM