Unemployment rates rose in all of the nation's largest metropolitan areas for the second straight month in February.
The U.S. Labor Department reported Wednesday all 372 metropolitan areas tracked saw their jobless rates rise in February from a year earlier. Indiana's Elkhart-Goshen and North Carolina's Hickory-Lenoir-Morganton, both hammered by manufacturing layoffs, registered the biggest annual increases.
The U.S. unemployment rate rose to 8.1% in February, the highest in more than 25 years. Economists predict the national jobless rate will climb to 8.5% in March. The government releases that report on Friday. It will probably hit 10% by year-end even if the recession were to end later this year, they said.
Eklhart-Goshen's jobless rate soared to 18% in February, up 12.5 percentage points. The area has been battered by layoffs in the recreational vehicle industry. RV makers Monaco Coach, Keystone RV and Pilgrim International have cut hundreds of jobs.
The jobless rate in Hickory-Lenoir-Morganton jumped to 15.7%, a 9.3 percentage point increase in the area located about 60 miles northwest of Charlotte. About one-third of all jobs in Hickory, N.C. are at manufacturing plants, said Scott Millar, director of the Catawba County Economic Development Corp., which recruits new businesses.
"I think part of the issue we're dealing with is pure math as the nation changes into a services oriented economy," Millar said.
The local layoffs accelerated at furniture makers and textile producers that have been shifting work to low-cost overseas producers for a decade, and at auto suppliers battered by slumping car sales. Even the fiber-optic cable manufacturers that once seemed to be the region's hope are suffering from a lack of orders. Corning Cable Systems in February said it would eliminate about 200 jobs as it shut an optical assembly plant in Hickory.
El-Centro, Calif., continued to lay claim to the highest unemployment rate — 24.5%. The jobless rate is notoriously high in the area, where many unemployed are seasonal agriculture workers.
Following close behind were Merced, Calif., with a jobless rate of 19.9%, and Yuba City, Calif., at 18.9%. Elkhart-Goshen rounded out the top four.
Louisiana's Houma-Bayou Cane-Thibodaux region had the lowest unemployment rate at 3.5%. The area, with about 200,000 residents, is located on the coast and serves as a vital support area for the offshore petroleum industry in the Gulf of Mexico.
Because of deepwater drilling in the Gulf, where projects take years to complete and bring to production, there has been little short-term effect from low energy prices.
There are several large shipbuilders in the region, including Bollinger Shipyards and Edison Chouest Offshore, along with several companies that construct the huge production platforms used on deepwater projects. Offshore service companies that maintain production units and companies that transport personnel and supplies to and from the units, which Edison Chouest does as well, also use the area as a staging point.
"The problem is they can't find enough people," said Louisiana State University economist Loren Scott, who studies the state's employment picture. "They'd love to find more."
Fallout from housing, credit and financial crises — the worst since the 1930s — is forcing companies to lay off workers and resort to other cost-saving measures to survive the recession. A separate report, released Wednesday, said that private employers cut 742,000 jobs in March.
Employment at medium- and small-sized companies fell the sharpest — by a combined 614,000. The rest of the job cuts came from big firms — those with 500 or more workers— according to the report produced by Automatic Data Processing and Macroeconomic Advisers.
"The sharp employment declines among medium- and small-sized businesses indicate that the recession continues to spread aggressively beyond manufacturing and housing-related activities to almost every area of the economy," said economist Joel Prakken, chairman of Macroeconomic Advisers.
Federal Reserve Chairman Ben Bernanke said the recession, which began in December 2007, could end this year, setting the stage for a recovery next year only if shaky financial markets are stabilized.
To brace the economy, the Fed has slashed a key bank lending rate to an all-time low and has embarked on a series of radical programs to inject billions of dollars into the financial system.
The Obama administration's $787 billion stimulus package includes money that will flow to states for public works projects, help them defray budget cuts, extend unemployment benefits and boost food stamp benefits. The administration also is counting on programs to prop up financial companies and reduce home foreclosures to help turn the economy around.
Companies are cutting jobs and other costs to survive the recession. Sales and profits have been hurt as consumers have hunkered down. That's caused the economy to shrink. Analysts believe the economy will keep on shrinking through the first six months of this year.
Contributing: Associated Press writers Alan Sayre in New Orleans and Emery Dalesio in Raleigh, N.C.