These Eight States Still Haven’t Regained All Their Lost Jobs

The Wall Street Journal The Wall Street Journal

Six states had record-low unemployment in June, others still lagged pre-2009 employment peaks

Rhode Island hit a long-awaited milestone this year. The Ocean State finally has more jobs than it did before the nation tumbled into recession last decade.

But nonfarm payrolls in June still lagged high-water marks set in 2008 or earlier in eight states struggling against headwinds like population loss and the manufacturing sector’s long-term decline: Alabama, Connecticut, Illinois, Michigan, Mississippi, New Mexico, Ohio and Wyoming.

At the same time, unemployment rates were at all-time lows in six states, a mix of regions that are experiencing strong growth and other places with slower job gains and possible worker outflowsArkansas, California, Colorado, North Dakota, Tennessee and Washington. Records for state unemployment rates go back to 1976.

The U.S. as a whole appears to be at or near what economists consider full employment. But the latest data highlight the uneven state of local labor markets across a sprawling, diverse nation. Joblessness last month ranged from 2.3% in Colorado and North Dakota to 6.4% in New Mexico and 6.8% in Alaska.

Down, Down, DownIn June, unemployment rates in six states were at their lowest levels since records began in1976.The national rate was 4.4%.THE WALL STREET JOURNALSource: Labor DepartmentNote: Seasonally adjusted
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The Labor Department on Friday released its monthly report on state-level employment. At the national level, the unemployment rate last month was 4.4% and total nonfarm employment was a record 146.4 million.

In most states, nonfarm employment in June either was at an all-time high or modestly below a peak for jobs that was reached sometime after the recession ended in mid-2009. That’s not a surprise, since the U.S. population is growing and the overall economy has been expanding for eight years.

But in some places the population is shrinking, or major industries are in long-term decline, or other factors are at work resulting in fewer jobs overall.

Some areas face structural challenges, such as factory employment’s long decline. Across a swath of the industrial Midwest – Illinois, Michigan and Ohio – employment peaked back in 2000 and still hasn’t recovered to that level after two national recessions and two recoveries.

For other states, the local jobs recovery has simply been much slower than the national average.

In Rhode Island, total public and private payrolls peaked in December 2006 at 495,700, and Ocean State employers had shed nearly 40,000 positions by the summer of 2009. It took until May for the state to set a new record for nonfarm employment, which rose in June to 496,600. By contrast, the U.S. as a whole replaced its millions of lost jobs in 2014.

Ocean State Job LossRhode Island has finally recovered from recession-era job loss. Difference from the priorhigh in nonfarm Rhode Island employment:

There’s no guarantee all eight states will replicate Rhode Island’s achievement and regain all of their lost jobs in the near future. In past recoveries, some states saw their unemployment rates return to normal levels not because jobs returned but because job seekers moved away or otherwise departed the local workforce.