Is The Employment Situation Really Stabilizing

March 26, 2010

An article published on March 26th on USA Today’s website gave the impression that the US employment situation is stabilizing.

In their article, they go on to say that fewer states are seeing their unemployment rates increase than a couple of months ago.  They also go on to quote a survey done by Thompson Reuters, which indicates most economists expect an increase of about 150,000 jobs nationwide for the month of March.

It is true that a couple less states are seeing sequential, month-to-month increases in their unemployment ranks.  However, painting a picture that the economy is, indeed, stabilizing is really stretching the truth.

If one looks at the unemployment change table that USA Today included in their article and compares it to the total population of each state, a very different picture emerges. 

We used Wikipedia to obtain populations of each state and the percent of total US population they represent.  Wikipedia’s data comes from none other than the US Census Bureaus’ 2008 National State Population Estimates.

Skewed Unemployment View

When we added up the populations of each state with declines in unemployment rates, we found that, in total, these states represented LESS than 10% of the total US population.  That means that less than one in ten Americans were in states where the jobs situation is improving.  Examples of states where employment is getting better include such tiny dominions as Vermont, Wyoming and the District of Columbia.

What about the other 90% of the population?  The situation here is much darker.  We found that states that saw continued erosion in their employment situation represented nearly 46% of the country’s population!  That’s right; nearly 1 in 2 Americans are in states where the situation is getting worse.  The remaining states that did not see their situation get better or worse continue to stagnate at incredibly high official unemployment rates.

Jobs Situation Still Dire and Eroding

If the jobs situation is not really improving, what is happening?  Unfortunately, the situation is getting worse.  If we add up the changes in rates and weight them by the population of each state, we arrive at a cumulative increase of 0.06% increase in the jobless rate for the Month of February.  Although 0.06% does not sound like that big of a deal for an individual month (especially when the rate is currently at 9.7%), if this level of “stabilization” were to continue for the next 12 months, it would spike up the rate of joblessness from 9.7% to nearly 10.5%.  To us, that doesn’t sound like much of “stabilization” or “green shoots” for our economy.

http://www.savingsandloanbailout.com/February-2010-Unemployment-Rate-Data-vs-Population-By-State.html

http://www.usatoday.com/money/economy/2010-03-26-state-jobless_N.htm?csp=34&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+UsatodaycomMoney-TopStories+%28Money+-+Top+Stories%29&utm_content=My+Yahoo