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The Honolulu Advertiser
Posted on: Monday, February 9, 2009

Every state in U.S. forecast to lose jobs by the end of 2009

By Barbara Hagenbaugh and Barbara Hansen
USA Today

When it comes to the U.S. job market, there are few places to turn.

Every U.S. state and 95 percent of the nation's metropolitan areas will end 2009 with fewer jobs than they started with, while only education, health services and government will add workers.

That's the grim prediction from economic consulting firm Moody's Economy.com that illustrates how the recession is touching Americans in every corner of the country.

And it means that, unlike in prior downturns, most people who lose their jobs can't simply pick up and move to find work, an issue compounded by the housing crisis. Such an unprecedented lack of mobility will make the downturn longer and deeper, economists at Moody's Economy.com, Wachovia and others say.

"There really is nowhere to hide in this economy," Moody's Economy.com chief economist Mark Zandi says.

"If you lose your job, it's not clear where you should move to find one or even what training or education you need to retool yourself," he says. "The hallmark of the current downturn is that it is so broad-based across industries, occupations and regions of this economy."

Workers in some states certainly will be better off than others. Employers in six states — Washington, Texas, North Dakota, Colorado, New Mexico and Nebraska — and Washington, D.C., are expected to shed less than 1 percent of their workers this year.

BAD START TO NEW YEAR

At the same time, Ohio, Missouri, Florida, Connecticut, Hawai'i and Michigan are forecast to lose the greatest proportions of their states' jobs. Michigan, hit hard by a rapid decline in the U.S. automotive industry, is expected to shed more than 175,000 jobs this year, a 4.3 percent decline, according to Moody's Economy.com.

Nationwide, employers are expected to cut 2.7 million jobs this year after eliminating more than 2 million positions in 2008, according to Moody's Economy- .com.

The year is off to a bad start.

Firms cut 598,000 jobs in January, the most since 1974, the Labor Department said Friday. The unemployment rate rose to 7.6 percent, the highest in more than 16 years.

More than 11.6 million people were unemployed last month, up 54 percent from a year earlier and the most since December 1982.

This month isn't looking much better. Already, household names such as Macy's, Electronic Arts and PNC Financial Services have announced thousands more layoffs.

ABILITY TO MOVE

The ability to move to a place where there are better opportunities is important to the health of the U.S. economy and has long made downturns in the United States shorter and shallower than those in other parts of the world, Zandi says.

But not only is it tough to find jobs elsewhere this time around, with the housing market in a deep slump, people who could find a job elsewhere are stuck.

"That really hurts people's ability to be mobile because they can't sell," says Donald Grimes, senior research associate at the University of Michigan, who studies labor trends.

Conference Board chief economist Bart van Ark attributes the uniformity of the downturn to the financial industry's crisis, which has led to tighter or more expensive credit for businesses and consumers no matter where they are.

Without access to affordable credit, businesses and consumers can't finance investments, inventories and other spending. That has led to a sharp deterioration in the economy from coast to coast.

The New York-based Conference Board's measurements of consumer confidence are down sharply in all regions of the nation compared with a year ago.

In a USA Today/Gallup Poll of 1,027 adults conducted Jan. 30-Feb. 1, 38 percent said they had cut back on spending "a lot" in the last six months because they were concerned about their income; an additional 36 percent said they had cut back "a little."

Employers across the country are expected to begin adding jobs in 2010, but it won't be until late 2011 that the number of jobs is equal to the levels that existed when the recession began at the end of 2007, Moody's Economy.com predicts.

That is assuming Congress enacts a fiscal stimulus plan in the neighborhood of $825 billion and an expansion of the financial system's bailout, including a program to prevent home foreclosures.

Other analyses are gloomier. Another consulting firm, IHS Global Insight, thinks that the prerecession peak of jobs won't be reached until the third quarter of 2012.