Behind the national unemployment rate lies a tale of 50 states
Hidden behind the homogenized national unemployment figure due out today are state and local recoveries from joblessness as different as skim milk and heavy cream.
Five states were able to cut the number of jobless by at least a third over the 12 months ending in December 1983, the latest period for which state and local jobless figures are available. New Hampshire led this group with a 40.5 percent reduction in the number of unemployed. But in the same period Delaware and North Dakota were not able to trim the number of idle workers at all, and their ranks actually grew 15 percent in Oklahoma.
The result of these sharply different rates of recovery is a wide jobless gap beteen have and have-not states. For instance, West Virginia suffers from a 15.7 percent unemployment rate while only 4.5 percent of the Connecticut residents seeking work have been unable to find it.
States and metropolitan areas always have recovered from recessions at uneven rates. But the difference is sharper than usual this time, experts say.
Judging by the various states' experience, there appears to be no one remedy for unemployment. But experts say producing weapons or wheat seems to help. Farm states like Kansas and Nebraska have among the lowest rates of jobless, as do states like Connecticut and Virginia, which host strong defense industries.
Overall, the US is bouncing back strongly from its worst bout of unemployment since World War II. The February jobless rate, scheduled for release today, may show some additional progress from January's 8.0 percent level.
''The unemployment rate should be down'' to 7.8 percent, says Steven Wood, a senior economist at Chase Econometrics, a forecasting firm.
Other forecasters, looking at the erratic path of state unemployment claims, think there may be a slight rise in the jobless rate reported this month before it resumes moving downward. While the rate of decline will be slower than in 1983, by year's end the jobless rate should hit 7.3 percent, says Donald Ratajczak, director of the Georgia State University Economic Forecasting Project.
But the national jobless rate obscures vast differences among states and metropolitan areas. To some extent the variation is nothing new. ''But the distribution between the highest and and lowest (state jobless rates) is much more diverse this time both through the recession and the recovery,'' Mr. Wood says.
The gap between areas with high and low unemployment ''is almost as severe today as in December 1982,'' says Audrey Freedman, an economist at the Conference Board, a business research group.
For instance, the gap between Laredo, Texas, and Stamford, Conn., has only dropped half a percent in the most recent 12 months for which data is available. Laredo, located on the US-Mexico border, now has a 22.0 percent unemployment rate. Stamford, home to several large corporations and many corporate executives , has a 3.2 percent jobless rate.
One reason for the greater gap beteen state jobless levels is that the latest recession was triggered by high interest rates. These were very damaging to the economy's manufacturing sector, concentrated largely in Midwest and North Central states. Many of these states were already weakened from an employment standpoint because they were losing jobs to the Sun Belt before the recession began. And to the extent those states, including Michigan, Indiana, and Ohio, were engaged in producing industrial materials, the outlook remains relatively bleak as competition from lower-cost imports increases.
But it's not just states in what economists call the Midwest ''Rust Bowl'' that are having unemployment problems. Mr. Ratajczak says that the highest concentration of blue-collar workers is the four-state area of Tennessee, Alabama, Mississippi, and Kentucky. All except for Kentucky have unemployment of 10 percent or more. Another state in the South Central region, Louisiana, also has an unemployment rate slighlty in excess of 10 percent. One factor affecting unemployment in all the energy states, including Louisiana, is lagging exploration activity in the face of ample energy supplies.
The other pocket of high unemployment is the Northwest, where Washington and Oregon have been hurt by a shift in the forest industry's emphasis toward the lower-wage South.