Unemployment drops in regions with growing manufacturing
High unemployment still plagues much of the country, but regions such as Ohio and Michigan are actually seeing impressive job gains as manufacturing activity picks up, especially in the auto industry. Those gains may be reversed in upcoming months, though, as high inventories and decreasing demand for transportation equipment slow factory activity.
The region with the largest decrease in the unemployment rate in the country was Muskegon-Norton Shores, Mich., which saw unemployment drop 2.6 percentage points to 9% from October 2010 to October 2011, according to data from the Bureau of Labor Statistics. Flint and Jackson, Mich., also saw significant drops of 2.5% each.
In Ohio, unemployment in Steubenville fell to 10.3% in October from 12.6% the previous year, and to 8.9% from 10.2% in the perennially knocked-about town of Youngstown. By comparison, 76 metro areas saw unemployment rates increase over the year.
"Youngstown in particular, and Ohio in general, are doing substantially better than we were," said George Zeller, an economist research analyst in Ohio. "Auto sales had been picking up, which is where the recovery is coming from."
Youngstown’s manufacturing employment has grown 12.4% from 2010 to 2011, and the region leads the state in manufacturing growth, Zeller said. Two steel plants are under construction in Youngstown, and auto parts suppliers across the state are picking up production. GM’s Lordstown plant, which makes the Chevrolet Cruze, had been booming until the company shut the plant down for two weeks after slowing sales.
That slowdown worries Zeller, who says the recovery isn't happening quickly enough.
“We have been getting a slow recovery, but it is extremely slow,” Zeller said. “And it has been taking a relapse lately.”
Part of the reason for that relapse, Zeller said, is that activity picked up significantly after production delays related to the Japanese earthquake and tsunami were solved. Now it could be slowing again. Reports out Monday indicate that new orders for manufactured goods slipped for the second straight month in October, falling 0.4% to $450 billion. Inventories were the highest since the data started being measured in 1992, indicating the goods have been manufactured but not purchased. Auto inventories grew the most in the month.
Still, cars sold at a brisk pace in November, with national auto sales up 10% from November 2010.
-- Alana Semuels
Photo: Auto plant in Youngstown. Credit: Bob Jagendorf via Flickr