Two More States Hit Double-Digit Joblessness

February Jobless Numbers

North Carolina and Rhode Island joined a growing list of states whose unemployment rate has reached double digits amid the nation's worst recession in decades, a government report said Friday.

The U.S. unemployment rate, released earlier this month, rose to 8.1 percent in February, the highest in more than 25 years. Economists expect the national jobless rate to hit 10 percent by the end of the year even if the recession, which began in December 2007, bottoms out.

The Labor Department's survey came on the same day that the latest data released indicated a slight uptick in consumer spending in February for the second consecutive month. The 0.2 percent rise was in line with economists' forecasts — but when adjusted for inflation, spending actually fell by the same amount.

For the fourth quarter of 2008, consumer spending fell at an annual rate of 4.3 percent, the biggest decline in 28 years. Consumer spending accounts for two-thirds of U.S. economic activity.

Savings fell slightly to an annual rate of $450.7 billion. The savings rate was at 4.2 percent in February, a turnaround from the negative savings rates that were a hallmark of the months leading into the recession.

As the recession continues, many economists expect the gross domestic product, which fell by 6.3 percent in the last three months of 2008, to drop by a similar amount in the current quarter.

The Labor Department report on Friday said North Carolina had posted a 10.7 percent unemployment rate, while Rhode Island was at 10.5 percent. Michigan has the country's highest rate of 12 percent. South Carolina, Oregon, Nevada and California were also in double digits.

A total of 49 states and the District of Columbia saw their unemployment rates move higher in February. Only Nebraska, with a 4.2 percent rate, recorded a slight drop. Wyoming has the lowest unemployment rate, 3.9 percent.

Federal Reserve Chairman Ben Bernanke said the recession could end this year, setting the stage for a recovery next year only if shaky financial markets are stabilized, a view echoed by President Obama.

The administration is counting on a $787 billion package of increased government spending and tax cuts, a financial-bailout program and an effort to stem home foreclosures to help turn the economy around.

From wire service reports