By Kim Mackrael and Sarah Chaney
Large states in the Northeast and West logged some of the
highest unemployment rates in the nation in August, while many of
their Southern and Midwestern neighbors saw lower rates of
joblessness despite significant coronavirus outbreaks over the
The jobless rate in more than half of states was below the
national average of 8.4% in August, according to a Labor Department
report that provides details on the job market in all 50 states.
Many of those states -- including Arizona, South Carolina and Texas
-- recorded a surge in new coronavirus cases during the summer,
according to data compiled by Johns Hopkins University. Utah and
South Dakota have seen recorded cases of Covid-19, the disease
caused by the new coronavirus, move higher in recent weeks.
Unemployment rates in regions across the nation moved down this
summer after peaking in April, when the coronavirus first triggered
widespread lockdowns across the nation. Still, jobless rates
remained particularly high, on average, in the Northeast and West,
and clocked in above 10% in 10 states in the U.S.
In the Northeast, earlier virus outbreaks prompted businesses to
close and consumers to take greater precautions. Last month, New
York had an unemployment rate of 12.5%, Pennsylvania recorded an
unemployment rate of 10.3% and New Jersey's unemployment rate was
Adam Kamins, an economist with Moody's Analytics, said
unemployment rates improved noticeably in the region, particularly
in New York and Massachusetts. While the recession in those states
is probably over, he said, "Once you're a state that's been
particularly hard-hit, those effects linger economically."
Daniel Adams, the owner of Kerns Avenue Bowling Center in
Buffalo, N.Y., reopened this week for the first time since the
spring. He said the center lost three of its five bowling leagues
because of members' concerns about Covid-19, and will be operating
at 50% capacity when it opens lanes to nonleague bowlers. "The pain
is just starting," Mr. Adams said. Continuing to operate at half
the building's capacity "is not enough to sustain the
Mr. Adams said he hired back about half of the employees he had
before the pandemic began.
In a recent Brooklyn Chamber of Commerce survey, half of
businesses reported revenues were down more than 50% compared with
a year ago.
"They just don't have the customer base and support. They're
just not going to hire as many people," said Randy Peers, president
of the Brooklyn Chamber of Commerce. "That's a concern,
Still, many areas of pent-up demand were unleashed after some
restrictions on New York businesses were lifted, Mr. Peers said.
For instance, when barber shops and nail salons were allowed to
reopen, demand for those services was strong, Mr. Peers said.
Consumers flocked to outdoor dining once restaurants began filling
up sidewalks and streets with tables, he added.
New York's reopening helped pull down its unemployment rate to
12.5% from a pandemic high of 15.9% in July. Massachusetts, another
Northeastern state, experienced the largest monthly drop in its
jobless rate of any state last month.
"It does point to the fact that that region has been able to
avoid a second wave of cases and is moving towards a recovery,"
said Daniel Zhao, senior economist at job site Glassdoor.
Unemployment rates are influenced by a range of factors that go
well beyond the current rate of reported Covid-19 infections, said
Aneta Markowska, chief financial economist at the investment bank
Jefferies LLC. She said some of the states with the highest
unemployment rates in August were Nevada, Hawaii and New York --
all places that rely heavily on tourism.
Population density is another factor that appears to be
affecting state unemployment rates, Ms. Markowska said. "As people
flee large cities, demand for services is declining further in
those areas," she said, keeping unemployment levels up in places
like New York City.
States with large, higher-density cities, including California
and Illinois, experienced elevated levels of unemployment in
August, Friday's Labor Department report showed. The jobless rate
in both those states remained in the double digits last month.
The unemployment rate reflects the number of people who don't
have jobs but are actively seeking employment, compared with the
size of the state's labor force. It doesn't directly capture the
number of people who have dropped out of the labor force because
they aren't seeking work or are unable to work during the period
the survey is conducted.
For some states, a decline in unemployment rates was driven by
people dropping out of the labor force. That was the case in
Arizona, where the jobless rate fell to 5.9%, mostly because fewer
people reported that they were actively looking for work.
"Unfortunately, that kind of decline in the unemployment rate
does not signal an improvement in our labor market," said George
Hammond, an economist at the University of Arizona. "In fact, it
suggests that the state is still really struggling with the
economic fallout from the pandemic."
Some states' persistently high unemployment rates can be
explained largely by their reliance on tourism and hospitality.
Nevada, whose economy is primarily centered around the casino
business in Las Vegas, posted a 13.2% unemployment rate. Hawaii,
which requires all out of state travelers to self-quarantine for 14
days after they arrive, recorded a jobless rate of 12.5% in
In Florida, where the unemployment rate fell 4 percentage points
to 7.4%, Don Beaudet said his furniture-manufacturing business is
struggling to keep up with a surge in demand. After a one-month
closure in the spring, Mr. Beaudet said he brought back all 185 of
his employees in May and wants to hire another 15.
"To tell you the truth, business can't be better," said Mr.
Beaudet, adding that he believes people are spending more on home
furnishings because they can't go away on vacation. "We're getting
orders in faster than we can produce."
Write to Kim Mackrael at firstname.lastname@example.org and Sarah Chaney
(END) Dow Jones Newswires
September 18, 2020 13:05 ET (17:05 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.