Friday, September 18, 2009

Sinking Ships – MA vs. RI August 2009

Subtitle: MA Unemployment … Immune?!

As I had noted in my original post, historically it has been very unusual for there to be more than a 1.5% difference (either more or less) between the unemployment rates if Massachusetts and Rhode Island.

Recently though, we have seen a historically unusual spread between Rhode Island’s high and accelerating rate and Massachusetts’ far lower but now quickly rising rate.

In fact, after a short period of flattening and decline earlier in the year the latest 3.7% spread remains near the peak and exceeds ALL spreads seen in at least 40 years.

This indicates that either Rhode Island’s current rate would need to fall dramatically or the Massachusetts rate would need to increase sharply…. My sense, especially in light of the financial turmoil seen since September 2008, is that Mass will be continually playing catch-up.

The latest regional unemployment report shows that, in August, the Rhode Island unemployment rate increased to 12.8% while the Massachusetts rate jumped to 9.1%.

Massachusetts experienced the nearly the largest year-over-year increase in unemployment since the recessionary environment that followed the tech-led dot-com bust jumping 68.52% on a year-over-year basis clearly indicating that Mass is now embroiled in a period of truly explosive unemployment growth.