California's UI Fund To Run Huge Deficits

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How bad are things in the state of California?

Well according to an Unemployment Insurance (UI) Fund forecast issued by California's Employment Development Department (EDD), the fund which is currently about $8 billion underfunded will be over $27 billion in the red by 2011!

That's almost $1,000 for every man, woman and child in the state of California---Or almost $2,000 for every worker in the state---It will likely be many many years before CA is able to dig out of this hole.

Major Cities Continue to See Unemployment Rate Increases

According to Data from the Bureau of Labor Stats some of the nation's largest metro areas continue to see increases in their unemployment rate.

Currently, Data is only available up until December 2008--When the Nation's Unemployment rate was 7.2%---As of January, 2009 the US's unemployment rate was 7.6%---So If I had to guess, I'd say that most of these city's unemployment rates are really ~0.5% higher than what is currently shown.

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Of the 5 cities shown, Las Vegas has the highest unemployment rate in December, of 9.1% as gamblers and conventioneers continue to limit their trips to sin-city.

Los Angeles Metro Area saw an 8.8% unemployment rate and Atlanta was at 7.6%.

Chicago (7.1%) and New York (6.6%) Metro areas saw unemployment rates below the national average in the month of December.

Expect City by City unemployment rates to worsen

Even though the BLS issued its report earlier this week that the national unemployment rate is at 7.2%, it will be several weeks before they issue data by state & city. So the best they currently have to offer by city is for November-2008 (During which the US unemployment rate was 6.8%.
You can see that Washington DC had only 4.4% unemployment rate, Boston 5.0%, and Houston and Phoenix were both at 5.5%.

Miami was at 6.4% unemployed, Chicago at 6.5%; And Los Angeles came in at 8.1% and Detroit at 9.5%.

Seeing as how the national unemployment rate increased by 50bps since the November reports (from which these cities were pulled), don't be surprised if most of these cities increased by 0.5% themselves once more data is published

Comparing the unemployment rates of New York City, Chicago, LA, Las Vegas, and Atlanta

So I decided to take a look at the unemployment rate by major metropolitan area for several of the US's big cities---New York City, Los Angeles, Las Vegas, Chicago, and Atlanta. It's important to note that since this is at the metro-level (rather than national or state level), the unemployment rates are 'lumpier' --- just as a result of statistical sampling techniques used for each geography.



But in general you can see some trends, LA and Las Vegas have seen the steepest increase in unemployment rate during the last 2 years---followed by Atlanta & Chicago. And the diverse New York City economy seems to be holding in there a little bit better than its peers.