Unemployment rises in nearly all metro areas - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Unemployment rises in nearly all metro areas

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In this Feb. 17, 2011 photo, businesses solicit students as they fill out job applications during the Springfield Collegiate Career Job Fair at the University of Illinois Springfield, in Springfield, Ill. In this Feb. 17, 2011 photo, businesses solicit students as they fill out job applications during the Springfield Collegiate Career Job Fair at the University of Illinois Springfield, in Springfield, Ill.

WASHINGTON (AP) — Unemployment rose in nearly all of the 372 largest U.S. cities in January compared to the previous month, mostly because of seasonal changes such as the layoff of temporary retail employees hired for the holidays.

The Labor Department said Friday that the unemployment rate rose in 351 metro areas, fell in only 16, and was unchanged in 5. That's worse than December, when the rate fell in 207 areas and increased in 122.

Other seasonal trends, such as the layoff of construction workers due to winter weather, also contributed to the widespread increase.

Nationwide, the unemployment rate dropped to 9 percent in January from 9.4 percent in December. It ticked down to 8.9 percent in February. But the national data is seasonally adjusted, while the metro data isn't, which makes it more volatile. The metro data also lags the national report by one month.

The report shows that metro areas hit hard by the housing crisis are still struggling with high unemployment. At the same time, a strong recovery in the manufacturing sector, particularly among U.S. auto companies, has bolstered many smaller cities in the Midwest.

"The areas that have had very severe housing market corrections have shown the least improvement," said Sophia Koropeckyj, managing director at Moody's Analytics. That's particularly true for states such as California, Florida, Arizona and Nevada. Twelve of the 16 cities with unemployment rates above 15 percent in January were in California.

A high foreclosure rate and falling home prices are contributing to sky-high unemployment in the Riverside-San Bernardino-Ontario, Calif. metro area. Its unemployment rate of 14.2 percent was highest in the nation among cities with populations of 1 million or more. The second-highest was Las Vegas, with 13.7 percent.

The number of homes in foreclosure in Riverside is double the national rate, Koropeckyj said. And Moody's forecasts that home prices in the city will drop 60 percent from peak levels before the recession by the middle of this year.

The housing bust and a sharp drop in construction jobs is also a major factor behind the 25.1 percent unemployment rate in El Centro, Calif., the nation's highest. Yuma, Ariz., has the second-highest jobless rate, at 23.2 percent. Both metro areas border Mexico and have large numbers of migrant farm workers.

Meanwhile, several smaller cities that rely heavily on manufacturing have shown significant improvement since last January. The unemployment rate in Rockford, Ill., fell 5.3 percentage points in the past year, to 13.7 percent from 19 percent. That was the steepest drop in the nation. Year-to-year comparisons help filter out seasonal changes.

Chrysler LLC is investing $600 million in an auto plant near Rockford, which will start building smaller Fiat models in 2012. That's giving a boost to construction jobs, though it isn't clear if the expanded plant will add permanent workers.

And Kokomo, Ind., reported a 7.1 percent increase in jobs in January compared to a year earlier, one of the biggest gains in the country. It's also the site of a Chrysler plant that is expanding.

Lincoln, Neb., reported the nation's lowest unemployment rate, at 4.1 percent, followed by Fargo, N.D., with 4.6 percent, and Bismarck, N.D., 4.8 percent.

Copyright 2011 The Associated Press.

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