Tags: States | Lost | Jobs | recession

WSJ: Most States Still Years Away From Getting Back Lost Jobs

Tuesday, 22 May 2012 08:13 AM

Only four states — Alaska, North Dakota, Texas, and Louisiana — can boast that their unemployment rates have returned to prerecession levels, according to economist Steven Frable of IHS Global Insight.

Most of the remaining 46 states are at least two years away from getting their labor markets back to normal, Frable concludes, the Wall Street Journal reports.

Alaska, North Dakota, Texas and Louisiana are home to healthy energy sectors, while Louisiana's prerecession unemployment rate was high to begin with thanks to the damage Hurricane Katrina inflicted on the economy in 2005.

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"Two more states, New York and West Virginia, are expected to return to their prerecession peak later this year, and 10 more should reach the mark next year. But the majority of states still won’t get there until after 2014," the Journal reports.

"Meanwhile, returning to peak employment levels doesn’t necessarily mean jobs markets are healed. In fact, getting back to where a state started doesn’t account for the jobs needed by new entrants to the labor force over the past four years."

The U.S. unemployment rate hit 8.1 percent in April, which represents a steady decline from earlier this year due to a trickle of hiring but also due to more people leaving the labor force.

Jobless workers who grow frustrated of rejection and give up searching for work are not counted as part of the labor force, and a smaller labor force means a smaller percentage of people can be dubbed unemployed, making the economy look healthier than it really is.

The Organization for Economic Cooperation and Development, a group of 34 wealthy nations, is forecasting the U.S. employment rate to average 8.1 percent for 2012 and dip to 7.6 percent in 2013, still well above prerecession levels.

However, at the end of 2012, tax cuts and unemployment benefits are set to expire while automatic spending cuts are set to kick in, a combination dubbed by Wall Street as a "fiscal cliff" that could siphon hundreds of billions out of the economy and threaten the economy.

"The programmed expiration of tax cuts and emergency unemployment benefits, together with automatic federal spending cuts, would result in a sharp fiscal retrenchment in 2013 that might derail the recovery," the OECD says in a recent outlook, according to Reuters.

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2012-13-22
 

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