4 states see double-digit jobless rates in Jan.

WASHINGTON -- Four states — California, South Carolina, Michigan and Rhode Island — registered unemployment rates above 10% in January, and the national rate is expected to hit double digits by year-end.

The U.S. Labor Department's report on state unemployment, released Wednesday, showed the increasing damage inflicted on workers and companies from a recession, now in its second year. Some economists predict the U.S. unemployment rate will hit 10% by year-end, and peak at 11% or higher by the middle of 2010.

In December, only Michigan had a double-digit jobless rate. One month later, four states did and that doesn't count Puerto Rico, which saw its unemployment rate actually dip to 13% in January, from 13.5% in December.

California's unemployment rate jumped to 10.1% in January, from 8.7%, as jobs have disappeared in the construction, finance and retail industries.

Michigan's jobless rate jumped to 11.6%, the highest in the country. The second-highest jobless rate was South Carolina at 10.4%. Rhode Island was next at 10.3%, which marked an all-time high for the state in federal records dating to 1976. California rounded out the top four.

Forty-nine states and the District of Columbia registered unemployment rate increases. Louisiana was the only state to record a monthly drop. Its unemployment rate fell to 5.1% in January from 5.5% in December.

The U.S. unemployment rate, released last week, rose to 8.1% in February, the highest in more than 25 years.

Employers are laying off workers, holding hours down and freezing or cutting pay as the recession eats into sales and profits.

Disappearing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, driving companies to shrink their workforces. It's a vicious cycle in which all the economy's problems feed on each other, worsening the downward spiral.