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U.S.

Unemployment rises in more than half of US metros

Associated Press
Published | Updated

WASHINGTON – Unemployment rates rose last month in more than half of the nation's largest metro areas, driven higher by weak private-sector hiring and natural disasters.

The unemployment rate increased in 210 metro areas in May, the Labor Department said Wednesday. It fell in 131 cities and remained unchanged in 37. That's a sharp reversal from April, when unemployment rates dropped in more than 90 percent of metro areas.

Nationwide, the unemployment rate ticked up in May to 9.1 percent and employers added just 54,000 net jobs. Employers added an average of 220,000 jobs per month in the previous three months.

"You're seeing soft patches nationwide," said Mike Lynch, a regional economist at IHS Global Insight. "A lot of these things are temporary or short-term interruptions."

Tornadoes and flooding shut some companies down in the South in late April and May. And a parts shortage stemming from the March 11 earthquake in Japan affected U.S. auto production. The metro employment data isn't seasonally adjusted and as a result can be volatile from month to month.

One of the biggest increases was in Tuscaloosa, Ala., which was struck a deadly tornado that killed 41 people in late April. The unemployment rate there rose from 8.1 percent in April to 9.3 percent in May.

Several automakers were forced to shut down some or all of their North American factories because of the parts shortage. Six of the 10 steepest monthly increases in unemployment in May occurred in South Carolina, where many auto factories are located. In Sumter, S.C., the unemployment rate rose from 10.3 percent in April to 11.4 percent last month. Several cities in Michigan, including Detroit, Ann Arbor and Battle Creek, also endured big increases.

"They've scrambled like crazy to keep those plants going, by raiding and borrowing," said John Taylor, director of supply chain programs at Wayne State University. "They tended to get through March and April OK but they had problems in May and June went they had started to run out of creative ideas."

Mississippi River flooding in mid-May affected parts of the so-called Cajun Country in Louisiana, as did a severe slowdown in the number of permits issued for shallow and deep-water drilling in the nearby Gulf of Mexico. In New Orleans, the unemployment rate rose from 7.2 percent to 8 percent.

The sharpest increase in unemployment was in Yuma Ariz. The unemployment rate there rose from 25.3 percent in April to 27.9 percent in May. Competition from farmers in neighboring Mexico has left some cotton, wheat and lettuce growers out of work. Agriculture drives about 40 percent of Yuma's economy.

Many of the areas with the steepest declines are tourist destinations. Hotels and tourist attractions add workers for the summer season. Ocean City, N.J., reported the sharpest decline. The unemployment there fell from 13.3 percent in April to 11.6 percent in May.

Other steep drops were in three California metro areas: Madera-Chowchilla, Santa Cruz-Watsonville and Salinas. All three cities are big farming communities that demand more seasonal workers at this time of year.