Dubious Distinction Confirmed: Nevada is again #1 in Nation in Unemployment in June 2010

It didn't come as much of a surprise to state labor economists, but the U.S. Bureau of Labor Statistics today confirmed that Nevada reported the highest unemployment rate in the country for the second consecutive month, 14.2% in June. The Silver State also recorded the largest jobless rate increase from June 2009, up 2.3 percentage points.

Although Las Vegas’ June rate again surpassed Michigan’s – which before May, had the nation’s highest jobless rate - it won’t be clear whether Sin City again will be #1 in U.S. unemployment among U.S. states and major cities until the U.S. Department of Labor Statistics releases its metropolitan-area unemployment data July 28. 

However, in an email interview yesterday, Jered McDonald, an economist with the Department of Employment, Training & Rehabilitation, said in an email interview with Examiner.com, “I can tell you, though, that in May, Las Vegas had the highest unemployment rate among the nation's largest metro areas,” he added. “With an increase of four-tenths [of a percent,] to 14.5% in June, Las Vegas will be right up there again.”

In total, 25 states posted jobless rates significantly lower than the U.S. figure of 9.5%, 10 states had measurably higher rates, and 15 states and the District of Columbia had rates that were not appreciably different from that of the nation.

The five other states with the next highest rates were Michigan, 13.2%; California, 12.3%; and Rhode Island, 12.0%.

Jobless Benefits Extension Overcomes Critical Senate Obstacle

With exactly the minimum votes needed to overcome the fourth Republican attempt to block a federally financed extension of unemployment benefits, Senate Democrats this afternoon advanced a House bill that will restore the cash payments to millions of jobless Americans.

A final Senate vote is expected later today, with all but certain passage being ratified in the House tomorrow.

Democrats in the Senate moved ahead with the bill after an interim appointee, Carte Goodwin, was sworn in this afternoon to replace the late Sen. Robert C. Byrd, D-W.V. Goodwin cast the 60th "yes" vote that gave the Democrats its filibuster-proof majority.

Nevada breaks unemployment record for 12th consecutive month in June; both state and Las Vegas expected to be at top in national unemployment rankings

Both my home state of Nevada and home city of Las Vegas reported record unemployment today. Reaching a new record high for the 12th consecutive month, the state's jobless rate ticked up two-tenths of a percentage point, to 14.2%, in June. The Las Vegas rate also jumped four-tens of a percentage point, to 14.5%, state officials announced today.

Although Las Vegas’ June rate again surpassed Michigan’s – which before May, had the nation’s highest jobless rate - it won’t be certain whether both the Silver State and Sin City again  will be #1 in U.S. unemployment among U.S. states and major cities until the U.S. Department of Labor Statistics tomorrow releases state jobless data for the remainder of states that haven’t independently released their data and releases its metropolitan-area data July 28.


But in the gambling capital of the world, odds are that the state and city will achieve the dubious distinctions once more.

Because the three states with the next-highest jobless rates in May all already have released their data, and all went down, “we do suspect Nevada will still have the highest unemployment rate” in the country, Jered McDonald, an economist with the Department of Employment, Training & Rehabilitation, said in an email interview earlier today.

Where Las Vegas will stand among large cities is more difficult to predict, McDonald added, because data at the metropolitan level is generally more volatile, and their rates are not adjusted for seasonal employment fluctuations the way state data is. “I can tell you, though, that in May, Las Vegas had the highest unemployment rate among the nation's largest metro areas,” he added. “With an increase of four-tenths [of a percent,] to 14.5% in June, Las Vegas will be right up there again.”    

Overreliance on tourism makes state dependent on national recovery

A slight decline in the U.S. unemployment rate in May was a good sign for Nevada because the state is so dependent on tourism spending from other parts of the country, DETR Chief Economist Bill Anderson said in a statement.

“One thing many Nevadans have come to realize during the current recession is that economic forces beyond our borders have the potential to significantly impact performance in the Silver State,” Anderson added. “Along those same lines, policy decisions at the national level can potentially have significant ramifications here in Nevada.”

Lack of unemployment extension adds to pain

Adding to the continuing troubling employment picture in the state, the June expiration of federal unemployment benefits extensions is hurting a growing number of unemployed Nevadans, the DETR said.

To date, nearly 40,000 state residents have exhausted their UI benefits, a number that grew by about 7,300 – or 8.3% – the week of July 10 alone. At an average payment of around $300, the latest drop in unemployment insurance payments eliminated almost $12 million in federal money – in just a single week – dollars that typically flows directly into Nevada's economy, the DETR noted, and benefit scores of businesses people patronize in their everyday lives.

The Senate is scheduled to vote Tuesday on an already passed House bill that would extend federally financed benefits. The Senate has been successful in filibustering the measure three times in the past few weeks, but a new Democratic senator to replace the late Sen. Robert Byrd (D-W.V.) will take place before the fourth vote occurs, which is expected to give the Democrats the filibuster-proof 60 votes needed for passage.

Record joblessness and underemployment keep Las Vegas #1 in home foreclosures

I live in suburban Las Vegas, which has been hit particularly hard by the Great Recession: it's currently #1 in unemployment, slipping past Michigan when the Silver State's jobless rate hit 14.1% last month, and it's been tops in the rate of home foreclosures for too many months to count.

The good news is that the state saw a decline in foreclosures in the first half of 2010, compared to last year, but the bad news is that it kept its dubious #1 national ranking, according to California-based RealtyTrac, which monitors foreclosures nationwide.

The company reported Wednesday that Nevada's foreclosure filings dropped 13% in 2H/2010 compared to the second half of 2009, and decreased 6% when compared to the first six months of last year.

Nevada had 64,429 foreclosures in the first half of 2010, which equates to one filing for every 17 homes, or almost 6% of all houses in the state, RealtyTrac reported.

Nevada had 38,077 foreclosure filings in the second quarter of 2010, which was 10% higher than the first quarter, RealtyTrac reported. The second quarter filings, however, were 13 percent lower than in the same period in 2009. Almost 11,000 homes were repossessed in the second quarter.

 

As if that isn't enough bad news, the area’s foreclosure problem isn’t over, according to national research firm CoreLogic.

In May, 21% of Las Vegas mortgages were delinquent by 90 days or more, CoreLogic says. Contrast that to January 2009, when the 90-day delinquency rate was 13%. The jump is a reflection of the poor economy - worse in Las Vegas than in much of the country because of the city's near total economic dependence on tourism and gaming - and the large numbers of Las Vegans who have lost their jobs or had work hours cut by the massive casino resorts along the Strip who employ hundreds of thousands, either directly or indirectly.

Backing that up, Forbes magazine published the results of an analysis earlier this week that put Las Vegas at the top of its list of riskiest cities for homeowners. 

Nevada had 38,077 foreclosure filings in the second quarter of 2010, which was 10% higher than Q1, RealtyTrac reported. The second quarter filings, however, were 13% below the level of the same period in 2009. The pace of properties entering foreclosure slowed because lenders delayed proceedings in favor of more short sales and loan modifications, the firm said.

Rounding out the Top 5 on the most residential foreclosures, Arizona was #2, Florida #3, California #4 and Utah #5.

Job openings down, layoff up in May, according to latest Labor Department statistics

Job openings dropped in May from the previous month and layoffs increased slightly, the Labor Department said today.

The dip follows two months of increasing openings, driven partly by temporary government hiring for the 2010 census.

Although May's total is 37% higher than the low point of 2.3 million openings in July 2009, it's still significantly lower than pre-recession levels of about 4.5 million openings per month.

Layoffs in May increased to 1.9 million, but remain at pre-recession levels. The department says layoffs peaked at 2.6 million in January 2009.

Record joblessness contributes to Las Vegas' #1 ranking as Forbes' "riskiest city for homeowners"

Las Vegas ranks at the top Forbes magazine’s list of Riskiest Cities for Homeowners, the magazine reported in its July 9 issue, on newsstands today.

Overall, 7% of all U.S. homes loans are at least 90 days delinquent in the 10 riskiest cities in America – the rate is 10% in Las Vegas. Contrast that to the 4.4% average delinquency rate in the nation’s 100 largest metro markets. And record-high unemployment in Las Vegas and similarly distressed markets is fueling the problem.


"It's not purely a house price story; there's a second story going on," Kyle Lundstedt, a senior managing director at Lender Processing Services, the Jacksonville, Fla.-based mortgage-industry service provider that compiled data for Forbes’ analysis, told the magazine. "When you combine even moderate house price declines with significant unemployment, you get a double whammy that has significant consequences for the consumer."

Along with finances, outlook on life and optimism are casualties of Great Recession, survey says

The Great Recession has left Americans not only financially devastated, but emotionally overwhelmed as well.

More than three-quarters of Americans reported that they have significantly changed their outlook on life since the start of the worst economic downturn since the Great Depression, according to a poll conducted in late June by public opinion consultancy StrategyOne. Other disturbing findings:

• 58% of those surveyed have reevaluated their approach to life since the recession began
• 52% have become less hopeful about the future since the recession began
• 49% now believe that, because of the recession, that they will probably fall short of their personal or professional goals

In addition, significant numbers of Americans report their temperaments and behaviors have changed - for the worse - since the recession began in December 2007:

• 42% have become more easily angry or emotional since the recession began
• 41% have become more depressed or are frequently sad since the recession began
• 33% find themselves screaming or raising their voice more frequently since the recession began
• 15% sought out assistance for mental health problems since the recession began

And a number of Americans are coping with the slow economy by drinking, smoking or using drugs more often.

• 19% started drinking or smoking more
• 6% started using illegal drugs or used them more often

In addition, many on the verge of significant life events - such as marrying, divorcing, having children or retiring - say they have postponed taking that step specifically because of financial considerations caused by the recession:

• 27% of women 18 to 34 years old have delayed having a baby
• 21% of those 55 years or older have postponed retirement
• 18% of single Americans have postponed getting married or engaged
• 9% of married Americans have delayed getting divorced

"There are a number of untold stories out of the 'Great Recession' - Americans changing their outlook on life, becoming less hopeful, and also putting off having a child or leaving a troubled marriage," said Bradley Honan, Senior Vice President of StrategyOne, who authored the study. "The impact of this recession on Americans can't be solely measured by job loss or how much value the stock market has lost. Instead, we must consider how much the emotional and psychological outlook of the country may have been substantially altered by what's happened."

Viewing a Leading Economist's April Predictions About Unemployment Today

The following is from testimony given April 14, 2010, before the Senate Finance Committee by Mark Zandi Chief Economist of Moody’s Analytics. It's frightening how appropro it is three months later to the unemployment situation and debate regarding Congress' decision not to extend unemployment insurance.

 
"The 8.4 million decline in jobs represents over 6% of the pre-recession job base, and the nearly double-digit unemployment rate means some 15 million Americans are looking for jobs. There are nearly five unemployed workers for each available position; normally the ratio is at most one unemployed worker per open position. (Note: It's now estimated that there are more than six unemployed Americans for each job.)

For anyone losing a job, moreover, it is extraordinarily difficult to find another. The average length of unemployment is closing in on eight months, and nearly half of those unemployed have been out of work more than the 26 weeks normally covered by unemployment insurance. (Note: the percentage of Americans who have been out of work for six months or more has now grown to 55%.) Even in the early 1980s—the last time unemployment hit double digits—only 1/4 of the unemployed were out of work that long. During the worst recession of the 1950s, closer to a 1/10 of workers were in this difficult position.
 

The unemployment statistics are bad, but they still understate the stress in the job market. Including those working part-time because they cannot find full-time work, and those who want to work but are not counted as unemployed because they have not looked for jobs in the past month, the so-called underemployment rate jumps to almost 17%.

This represents an astounding 26 million Americans. On top of that are those whose hours have been cut back; the average number of hours worked per week remains just above record lows.

... The recession’s severe job losses erased a decade of U.S. employment growth. Not until 2013 are payrolls expected to regain their previous peak. 

... It will take even longer for unemployment to decline to its full-employment rate. The estimated full-employment unemployment rate has already risen from below 5% prior to the Great Recession to nearly 5.5% now and could go even higher unless unemployment begins to decline soon. Assuming job growth performs as expected, unemployment will not fall back to a rate consistent with full employment until 2014.

It is ... important that policymakers provide emergency benefits to those who will lose their jobs this year. No form of the fiscal stimulus has proved more effective during the past two years than emergency UI benefits, providing a bang for the buck of 1.61—that is, for every $1 in UI benefits, GDP one year later is increased by an estimated $1.61. 

This economic boost is large because financially stressed unemployed workers spend benefits quickly, as opposed to saving them ... if emergency UI benefits are not extended ... the recovery would struggle to evolve into an expansion as anticipated.
 

... If large numbers of unemployed workers begin running out of UI benefits this spring and summer, consumer sentiment could sink further. Attitudes would sour not only among the unemployed but also among their relatives, friends and neighbors, as they worry more about their own situations."

June Jobless Rate Falls as Many Quit Looking

The nation's unemployment rate fell to 9.5% in June but only because 652,000 Americans quit looking for work, as conflicting economic signals cause investors and consumers to wonder whether the nation is continuing to recover or sliding back toward recession.

Unemployment fell from 9.7% in May even though the nation lost 125,000 jobs in June, the Labor Department reported today.

Nigel Gault, chief U.S. economist with economic, business and political forecasting consultancy IHS Global Insight, said the jobless rate depends on how many people are looking for work. So many Americans have been unemployed for so long that their benefits are expiring, which perversely contributed to June's statistical dip.

"The rate declined, but for all the wrong reasons," Gault told the San Francisco Chronicle.

Republicans Block Unemployment Insurance Extension for 4th Time

The Senate Thursday rejected yet another attempt to authorize extended unemployment insurance, falling one vote short of stopping a Republican filibuster that essentially killed the bill until after Congress' Fourth of July vacation.

As of today, 1.2 million unemployed Americans will stop receiving aid from the federal government, according to a report in the International Business Times.

The stopgap bill was the fourth attempt to revive unemployment insurance. To win Republican support, Democratic leaders slashed the bill's 10-year deficit impact from $134 billion to $33 billion, but Republicans still refused to budget from their "No" stance. "The only reason the unemployment extension hasn't passed is because our friends on the other side have refused to pass a bill that doesn't add to the debt," said Senate Minority Leader Mitch McConnell (R-Ky.)

Not true, according to The Washington Post. The only reason 2 million out-of-work Americans will have lost their unemployment benefits by Independence Day is because Sen. Robert Byrd (D-W. Va.) died Monday, robbing the Democrats of the additional single vote they needed for passage.

The bill will be re-introduced on July 14, after the July 4 recess and when Byrd's replacement is likely to be named.

A more callous, uncaring Congress?

Since the 1950s, extended federal benefits have never been allowed to expire with a national unemployment rate of more than 7.2%. The Bureau of Labor Statistics shows that the current rate stands at 9.7%, and some business analysts predict it will climb another tenth of a percentage point, to 9.8%, in the latest federal unemployment figures set to be released Friday morning.