Economic Indicators | Jobs and Unemployment

State economies navigating troubled waters as federal sequestration takes a toll

Today’s release of state employment data from the Bureau of Labor Statistics echoes the disappointing national report earlier this month, reinforcing the fact that more than five years after the beginning of the Great Recession, there is still a long way to go before the labor market finds its way to solid terrain.

Between December 2012 and March 2013, eight states experienced decline in overall employment. Although all regions of the country saw overall  employment growth between December and March, that growth slowed considerably in the Northeast and Midwest, with growth rates of just 0.3 percent and 0.2 percent respectively.  Only one state – Utah, with 1.7 percent job growth – reported employment growth greater than 1.0 percent during this time period.

For the third consecutive month, there were no states experiencing double-digit unemployment in February, though there continued to be seven states—Nevada, Illinois, California, Mississippi, North Carolina, Rhode Island and New Jersey—with unemployment rates of 9.0 percent or more.  The number of states in which the unemployment rate is now less than 5.0 percent remains at seven, including two–Nebraska and North Dakota –with rates less than 4.0 percent. With fifteen states and the District of Columbia reporting higher unemployment rates in March than three months earlier, the case for continued economic recovery becomes increasingly tenuous.

The March employment report clearly signals the negative economic impact resulting from federal sequestration.  The resulting economic drag makes it increasingly important that state policy makers avoid budgetary and policy decisions that compound the economic harm imposed at the federal level.

— Research assistance provided by Natalie Sabadish and Hilary Wething

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