Wednesday, January 20, 2010

Unemployment to Stay High Until 2013

Research firm Global Insight issued a report stating that unemployment rates will likely peak in most U.S. cities in 2010, however it will take several ("many") years before jobless rates drop to their lows of the last decade. The report was published by Reuters.

In California's central valley and cities in Nevada, unemployment rates will stay at or above 10% through 2013.

"What is just as alarming as the double-digit unemployment in many of the nation's major metro areas is the lethargic rate at which it will recede once the job market turns around,"

In November 2009, the last month 17 metropolitan areas had unemployment rates topping 15%. Global Insight says that metropolitan areas account for 86% of U.S. employment and 90% of its economic output.

"While cities such as the manufacturing centers in the Midwest will soldier on with steep jobless rates for the next half-decade, many areas will see their rates fall below 5 percent.
The mid-Atlantic region, which includes the nation's capital of Washington, D.C., will likely have an unemployment rate of 4.3 percent by the end of 2013, according to the report. Boulder, Colorado, will have a slightly higher rate of 4.7 percent, followed by Honolulu, Hawaii at 5 percent.
The report also analyzed real gross metro product growth and found cities are still smarting from the national recession that began in 2007.
Baton Rouge had the largest economic expansion in 2009, but it was a slim 0.8 percent. Only eight metropolitan areas experienced any growth last year.
Global Insight projects the U.S. government's stimulus plan added about 0.8 of a percentage point to 2009 national gross domestic product growth and will add 1.3 percentage points to 2010 growth.
Still, it said, there is no strong correlation between where the money is spent and where it is needed. It found Las Vegas contributes 75.1 percent of Nevada's gross state product, but only gets 30.9 percent of the state's stimulus funding".

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