U.S. states see public sector job losses

Recession left behind “uneven economy” with public sector losses, private sector gains
|hrreporter.com|Last Updated: 09/25/2013

WASHINGTON (Reuters) — Illinois reflected a larger trend among U.S. states in August: Its private sector gained 5,900 jobs from the previous month, but its public sector lost 1,100 jobs.

The state had the second highest unemployment rate in the United States at 9.2 per cent, which was unchanged from the previous month, according to Labour Department data released on Friday.

"Adding jobs without lowering the unemployment rate underscores the uneven nature of this economy and could continue depending how national and global events shape business plans and consumer confidence," Jay Rowell, director of the Illinois employment department, said in a statement.

In August, the federal government, excluding the postal service, lost 300 jobs, and state governments shed a total of 3,000 jobs from July. Local government gained 21,000 education jobs, the second month in a row that schools boosted hiring, but cities and counties eliminated 500 jobs in other areas, the Labour Department reported earlier this month. Over the year, the entire government sector loss 94,000 jobs.

"In general, governments have been slashing jobs and the private sector has been picking up the slack," said Brent Campbell, who follows U.S. regional trends as an associate economist for Moody's Analytics.

In Wisconsin, where the jobless rate ticked down to 6.7 per cent in August from 6.8 percent in July, the private sector added 7,300 jobs, mostly in construction. Local government, meanwhile, lost 1,200 positions, according to the state's employment department.

Maryland, where the federal government is a large employer and contractor, is also seeing strength in the private sector. The state gained 9,700 jobs in August from July, and its unemployment rate dropped to 7 per cent from 7.1 per cent.

"Today's jobs report also reaffirms the strength of Maryland's dynamic private sector. Over the past 12 months, our businesses have created 37,800 jobs - nearly nine out of every 10 new jobs created in our state," Maryland Governor Martin O'Malley said in a statement on Friday.

In neighboring Virginia, the unemployment rate rose slightly to 5.8 per cent from 5.7 per cent in July. Both the private and public sectors in the state lost jobs, but the losses in total government equaled 1,100, compared with 800 jobs shed in areas such as trade and transportation, construction and manufacturing, according to a state report also released on Friday.

Jobs terrain

The Labour Department data also showed the jobs terrain was still uneven among the states in August.

Jobless rates rose from the month before in 18 states and the District of Columbia, dropped in 17 and remained the same in 15. From August 2012, unemployment rates dropped in 36 states and the District of Columbia, rose in 12 and were unchanged in Arizona and Oklahoma.

Similarly, the Labour Department found the number of jobs increased in 29 states since July, decreased in 20 states and the District of Columbia and was unchanged in Montana.

New York saw the largest increase, adding 30,400 jobs, followed by California with 29,100 jobs. The largest decrease occurred in Georgia, which lost 16,100 jobs, followed by Ohio, 8,200 jobs.

"The longer-term trend is still strongest for the west and southern regions," said Campbell. "The south has a really strong energy driver and in the west it's the tech drivers."

Growing incomes in those regions will lead to more home buying and consumer spending, he added, which in turn should generate more jobs.

The 2007-09 economic recession was fairly uniform across the states, sparing only a few, but the recovery has been uneven. States with strong natural gas and energy sectors have pulled ahead, leaving behind states where the housing bust was biggest, budget problems trenchant, or manufacturing has seen a long decline.

North Dakota again had the lowest unemployment rate in the country in August at 3 per cent, the same as July, riding a wave of energy-related job gains.

The highest rate was in Nevada at 9.5 per cent, also unchanged from July. The state "still has a big hole to dig out from" caused by the housing bust, Campbell added.

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