Report says Waterloo-Cedar Falls only metro without rising unemployment - KWWL - Eastern Iowa Breaking News, Weather, Closings

Report says Waterloo-Cedar Falls only metro without rising unemployment


(Washington, DC-AP)

Unemployment rose in all but one of the 372 metropolitan areas tracked by the Labor Department at the start of 2009 and areas of California were among the hardest hit, according to government data released Thursday.

That means jobless rates rose in January in 99.7 percent of the cities compared with a year ago. By comparison, in January 2008, one month into the current recession, unemployment increased in only 234 metro areas, or 63 percent.

Waterloo-Cedar Falls, Iowa, where the unemployment rate was unchanged at 4.4 percent, was the only metro area that didn't see an increase. All 49 metro areas with more than 1 million people saw their rates rise in the past year, the department said.

Most economists expect job losses to mount this year, even with the Obama administration's $787 billion stimulus package and other government efforts. The nationwide unemployment rate, which stood at 8.1 percent in February, could reach 10 percent by the end of this year.

Initial jobless claims fell slightly last week to 646,000, the Labor Department said Thursday, but topped 600,000 for the seventh consecutive week. The number of people continuing to receive benefits reached a new record of 5.47 million people, nearly double the 2.85 million a year ago.

"The average duration of unemployment is getting longer as laid-off workers struggle to find new employment," David Resler, chief economist at Nomura Securities International, wrote in a client note.

Fourteen areas had unemployment rates above 15 percent in January, the department said. Ten of those areas are located in California, including El Centro, which has the nation's highest jobless rate of 24.2 percent, the department said. The jobless rate is notoriously high in El Centro, where many unemployed are seasonal agriculture workers, including some who live in Mexico.

The next highest rates were in Merced, Calif., at 18.9 percent and Elkhart-Goshen, Ind., with 18.3 percent of its people out of work.

Elkhart-Goshen also posted the biggest increase in its unemployment rate since last year, with a jump of 13 points, the department said. The region has been bruised by layoffs in the recreational vehicle industry. Hundreds of workers have lost their jobs at RV makers such as Monaco Coach Corp., Keystone RV Co. and Pilgrim International.

Economic development directors in the neighboring Iowa cities of Waterloo and Cedar Falls, which are located about 100 miles northeast of Des Moines, said their success hinges on a large local employer, the area's relative economic isolation and a rare upside to last spring's flooding that damaged a number of homes and businesses.

The dependable employer is Deere & Co., which has laid off workers elsewhere but continues to employ about 5,100 in Waterloo who primarily build tractors for a largely stable agricultural market.

While flooding by the Iowa River was a huge headache last June, repairs to damaged buildings now are helping the community.

"By no way would we want (flooding) to happen again, but I think some of the federal money that's been pumped into our community has actually helped some of the housing industry," said Ron Gaines, director of developmental services in Cedar Falls.

"When times are good on the West Coast and East Coast, we have good times in the Midwest, but the highs are never as high," he said. "The same rings true when you have some bad economic times. The lows are never as low."

Among the 49 largest cities, the highest unemployment rates were in the Detroit area, at 13 percent, and Riverside-San Bernardino, Calif., at 11.8 percent. Detroit has been battered by plummeting auto sales, while the Riverside-San Bernardino area has suffered a major housing bust.

Financial center Charlotte, N.C., home to Bank of America Corp. and Wachovia Corp., saw the biggest jump among large cities, with its unemployment rate nearly doubling to 10.5 percent from 5.3 percent. It was closely followed by Riverside-San Bernardino, which jumped 5.1 percentage points to 11.8 percent.

More job cuts were announced Thursday when FedEx Corp. said it is planning an undisclosed number of layoffs as the company reported its fiscal third-quarter profit dropped 75 percent amid severe weakness in the global economy. The Memphis, Tenn.-based company, often seen as a bellwether for the U.S. economy, also plans to scale back some workers' hours and wages.

Associated Press writer Nigel Duara in Iowa City, Iowa, contributed to this report.

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