Friday, January 23, 2009

Unemployment Mashup – MA vs. RI December 2008

Subtitle: Thar She Blows!

As I had noted in my prior posts, 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, the current 3.1% spread continues to exceed 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, is that Mass will be the one playing catch-up.

Today’s MA and RI state unemployment reports show that, in December, the Rhode Island unemployment rate rose significantly again to 10% while the Massachusetts rate jumped dramatically to 6.9%.

In December, Massachusetts experienced the largest year-over-year increase in unemployment since the recessionary environment that followed the tech-led dot-com bust jumping one full percentage point and clearly indicating that Mass has now entered a period of truly explosive unemployment growth.