Retailers Favor States with Low Unemployment in Dec. ‘09 - Update
State unemployment rates generally increased in December 2009, with 43 states and the District of Columbia reporting over-the-month increases. Although the official U.S. unemployment rate remained flat at 10% during the month, the number of non-farm payroll jobs lost rose from 11,000 to 85,000. In a deviation from the previous few months, December saw retailers target states with below-average unemployment rates for new store openings.
In addition to the states and federal district reporting an unemployment increase, four states registered decreases and three states reported no change, according to the Bureau of Labor Statistics.
Michigan Reports Highest State Unemployment Again
Ten states and the District of Columbia reported unemployment rates above the national rate of 10%. Michigan again recorded the highest unemployment rate among the states (14.6%). The states with the next highest rates were Nevada (13%), Rhode Island (12.9%) and South Carolina (12.6%).
North Dakota continued to register the lowest jobless rate (4.4%)in December 2009, followed by Nebraska and South Dakota (4.7% each). The rate in South Carolina set a new series high, as did the rates in three other states: Delaware (9%), Florida (11.8%), and North Carolina (11.2%). The rate in the District of Columbia also set a new series high (12.1%).
In total, 27 states posted jobless rates significantly lower than the U.S. figure of 10%,10 states and the District of Columbia had measurably higher rates, and 13 states had rates that were not appreciably different from that of the nation.
All states and the District of Columbia recorded statistically significant increases in their jobless rates from December 2008. The largest of these increases were in Nevada and West Virginia (4.6 percentage points each), closely followed by Alabama (4.5 points)
and Michigan +4.4 points). The smallest rate increases occurred in Minnesota and Nebraska (0.8 percentage point each).
44 States Lose Significantly More Jobs in 12/09 than 12/08
In December 2009, 13 states experienced statistically significant over-the-month changes in employment, all of which were decreases. This situation deteriorated from November 2009, when only six states reported statistically significant monthly job decreases.
The largest statistically significant job losses occurred in California (38,800), Ohio (16,700) and Illinois (16,300). The smallest statistically significant decreases in employment occurred in Vermont (2,400), South Dakota (3,600), and Montana (6,400).
More tellingly, compared to December 2008, 44 states had statistically significant job losses in December 2009. This result is on a par with November 2009, when 45 states had statistically significant job losses compared to a year earlier. The largest statistically significant job losses occurred in California (579,400), Texas (276,000), Illinois (237,300), Florida (232,400), and Michigan (207,100). The smallest statistically significant decreases in employment occurred in South Dakota (10,900), Delaware (12,100), and Montana (13,700).
Retailers Switch New Stores to Low-unemployment States
During the previous several months, retailers targeted many of their new store openings in states with unemployment rates higher than the national average. In December 2009, retailers switched tactics and slated new stores for states with unemployment rates modestly below the national average.
Two major retail chains targeted Massachusetts, with a monthly rate of 9.4%, for new store openings in December 2009. Convenience store retailer 7-Eleven, Inc. purchased New England Pantry, a company that operated 58 convenience stores in Greater Boston under the White Hen Pantry brand. The White Hen acquisition significantly expands 7-Eleven’s presence in the greater Boston area, bringing the number of outlets 7-Eleven operates and franchises there to more than 170.
In addition, last month fast food sandwich chain Subway said it intends to open 130 new franchise stores in Massachusetts during the next five years. Subway currently operates about 175 stores in Massachusetts.
A retailer based in Massachusetts, coffee chain Dunkin’ Donuts, opened its first store in West Virginia via a franchise agreement. West Virginia had a 9.1% unemployment rate in December 2009.
And ice cream chain Baskin Robbins, which shares a parent company with Dunkin’ Donuts, opened the Houston, Texas market for franchise operations in December 2009. Baskin Robbins may open as many as 40 stores in the Houston area during the next few years. Texas reported an 8.3% unemployment rate last month.
