Jobs recovery will be sluggish

By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- The annual unemployment rate rose across all states and the nation's capital last year, with Michigan and Nevada posting the biggest jumps, according to a government report released Wednesday.

The average national unemployment rate spiked 3.5 percentage points to 9.3% in 2009, the biggest year-over-year jump since the Labor Department first began recording the data.

"The deterioration of the labor market was surprisingly severe and the worst we've seen in a long while," said John Lonski, chief economist at Moody's Investors Service.

He added that the real estate crisis and the credit crunch have triggered the most severe recession since the Great Depression.

The 2009 annual jobless rate in Michigan, which was pounded by the collapse of the auto industry, spiked 5.3 percentage points. It was also the state with the highest unemployment rate for the fourth consecutive year, at 13.6%.

Nevada's annual unemployment rate followed Michigan's with a 5.1-point rise to 11.8%. Jobless rates in seven additional states climbed by at least four percentage points.

Thirty states had average unemployment rates that were significantly better than the nation's level. North Dakota fared the best, with the smallest increase of 1.1 percentage points and the lowest rate lowest rate at 4.3%, and Nebraska followed close behind.

The proportion of those employed to those in the total working-age population also fell across the country in 2009. Four states, including Michigan, and Washington, D.C., posted drops in the ratio by at least four percentage points.

For the 34th year in a row, West Virginia reported the lowest employment-population ratio at 50.5%.

While the labor market's beating might be over, the recovery will be slow and painful.

In fact, the nation's average unemployment rate will likely tick higher in 2010, to match 1982's peak at 9.7%, but is unlikely to surpass that level, according to the Lonski.

Weekly jobless claims have been moving higher since the middle of January, suggesting employers are laying people off.

But even as the labor market stabilizes later this year according to economists' expectations, the unemployment rate will continue to climb as the underemployed return to the the labor market seeking jobs.

"We're going to see a misleading upward bias to the degree that the signs of an improving economy will lure people back into the job search. But if they don't get jobs, they'll begin to be classified as being unemployed," Lonski said. "It's the reverse of the discouraged worker effect."  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 6:50pm ET
Company Price Change % Change
Bank of America Corp... 16.15 0.02 0.12%
Facebook Inc 58.94 -0.78 -1.31%
General Electric Co 26.56 0.44 1.68%
Cisco Systems Inc 23.19 0.16 0.69%
Micron Technology In... 23.91 1.43 6.36%
Data as of 4:01pm ET
Sponsors

Sections

GM won't have to tell customers to keep their recalled cars parked until fixed, after a federal judge denied emergency motion Thursday. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

As Detroit moves closer to reaching a bankruptcy deal, retired civilian workers are poised to be left worse off than firemen and police officers. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.