Friday, August 21, 2009

Sinking Ships – MA vs. RI July 2009

Subtitle: MA Unemployment … Ouch!

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 3.9% spread remains at 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 July, the Rhode Island unemployment rate jumped to 12.6% while the Massachusetts rate jumped to 8.8%.

Massachusetts experienced the single largest year-over-year increase in unemployment since the recessionary environment that followed the tech-led dot-com bust jumping 69.23% on a year-over-year basis clearly indicating that Mass is now embroiled in a period of truly explosive unemployment growth.