Chart of the Day: The Uneven State Unemployment Recovery

In April, the national unemployment rate rose from 8.8% to 9.0%, but oddly the unemployment rate only increased in three states. Even though most states saw improvement, some did much better than others. For example, Nevada's unemployment rate fell by 0.7%, while Mississippi's rose by 0.2%. Throughout the past year, as unemployment began to slowly decline, we've seen an uneven recovery among states.

Here's a chart showing some selected states that have suffered from very high unemployment rates over the past few years, through the April data released today by the Bureau of Labor Statistics (you should really click on it to see a bigger version, as 590 pixels doesn't do it justice):

unemp 10 states 2011-04.png

You can see that the unemployment rates of some of the states that suffered the most -- like Michigan and Nevada -- have declined pretty significantly from their highs. Of course, each of these states still has relatively high unemployment rates, just not nearly as high as they were.

Meanwhile, other states -- like California, Rhode Island, and Georgia -- aren't faring nearly as well. They've seen some decline over the past few months, but their unemployment rates haven't seen a dramatic fall like some others.

Then there are states like poor Louisiana. Something is going wrong there, as its unemployment rate has slowly increased throughout the period during which it had declined in most other states. (Speaking of Louisiana, that giant peak you see in 2005 isn't a mistake: it's the effect of Hurricane Katrina.)

The reasons for this uneven recovery vary from state to state, and that's kind of the point. Different state economies are managing to recover more quickly than others due to their specific characteristics. For example, Michigan has seen some improvement likely due in large part to the auto industry getting bailed out.

But that isn't the state's entire story. It has also shed workers since its unemployment rate peaked in August 2009. From then through April 2011, its civilian labor force has contracted by 90,000 workers. It did, however, see employment rise by 105,000 workers. So there is some legitimate progress there too.

Nevada's big decline is mostly due to the same phenomenon. Since December, it had seen its number of unemployed residents fall by 34,000. But 20,000 of those people are no longer considered unemployed because they're no longer in the work force. The state added just 14,000 workers over the period. So its big 2.4% unemployment rate decline makes the state's labor market improvement look a lot better than it actually is.

In other states, however, the improvement has been real. In Florida, for example, the labor force has actually grown by 39,000 over the past year. So its unemployment rate has declined over that period entirely due to 84,000 additional jobs.

As the recovery continues, we can expect to see more of the same. Although most states will see unemployment decline as it does nationwide, the rates of improvement will vary. Though, as we have seen, some of this so-called improvement doesn't look so great when you dig deeper.