Unemployment falls in majority of metro areas

WASHINGTON - The August unemployment rate fell in about 60 percent of metropolitan areas from the previous month, as layoffs ease nationwide.

The jobless rate dropped in 232 of 380 metro areas, according to an Associated Press analysis of Labor Department data released Wednesday.

That's an improvement from July, when metro areas were split between those with rising and falling joblessness. It's also much better than in June, when the unemployment rate rose in about 90 percent of metro areas.

But in many cases the declines are due to large numbers of people dropping out of the labor force. Economists say that usually indicates unemployed workers are becoming discouraged and giving up on their job searches.

Job losses are moderating, but "not enough to keep the unemployment rate from rising," said Sophia Koropeckyj, an economist at Moody's Economist.com. "We're not seeing any hiring taking place."

The metro employment figures aren't adjusted for seasonal changes, such as layoffs in the agriculture industry after summer harvests, so they tend to be volatile from month to month. And many of the changes in local unemployment rates were too small to signal larger trends.

Most analysts expect the nation's economy, bolstered by government stimulus efforts, grew at a healthy clip in the July-September quarter, putting an end to the recession.

But many also agree with Federal Reserve Chairman Ben Bernanke, who said in September that growth isn't expected to be strong enough to reduce the jobless rate for some time.

The increase in discouraged workers is most apparent in large cities that reported the biggest drops in unemployment. The jobless rate in Toledo, Ohio, fell to 12.1 percent from 14 percent in July, while its work force dropped about 8,000, or 2.4 percent, to 328,000.

Unemployment in the Chicago area, meanwhile, dropped to 9.7 percent from 10.6 percent — while its work force also fell about 2 percent. Similar trends took place in Denver and Miami.

Once unemployed people stop looking for work — some, for example, may return to school — they are no longer counted as part of the labor force and aren't included in the jobless rate.

The declines generally "can be interpreted as discouragement over poor job prospects," Koropeckyj said.

The metropolitan unemployment data precedes Friday's report on nationwide unemployment in September. Wall Street economists expect that report will show joblessness rose to 9.8 percent from 9.7 percent in August. Employers are forecast to have cut 180,000 jobs, down from 216,000 the previous month.

Overall unemployment remains high. The jobless rates rose in all 380 metro areas from August 2008, according to the metro report.

The largest increase in the past year was in the Detroit metro area, which has been hammered by the downturn in the auto industry. Unemployment rose 7.9 percentage points to 17 percent, followed by the Muskegon, Mich., metro area, where joblessness increased 7 percentage points to 16.1 percent. Michigan's unemployment rate of 15.2 percent is the highest in the nation.

There were 129 areas with August jobless rates of at least 10 percent, the department said, down from 139 in July. Sixteen areas had unemployment rates of 15 percent or above; seven of those were in California and four in Michigan.

El Centro, Calif., had the highest jobless rate at 28.7 percent, followed by Yuma, Ariz., at 26.1 percent. The two areas are next to each other and have long suffered high unemployment due to many seasonal farm workers.

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