Do I hear 15 percent unemployment?

New state jobless numbers fuel GOP criticism of the stimulus. Michigan leads the pack in labor market woe

By Andrew Leonard
Published July 17, 2009 4:39PM (EDT)

Yesterday's initial jobless benefit claims data might have offered some encouragement to people looking for an improvement in the nation's labor situation, but today's report from the Bureau of Labor Statistics on June state-and-regional unemployment does not.

The unemployment rate is over 10 percent in 15 states. Michigan leads the field at 15.2 percent, the worst mark for any state since West Virginia broke 15 percent in 1984. California, which boasts the largest economy of any state in the union, is at 11.6 percent, inching up from 11.5 percent in May.

Truly committed optimists might take heart at the fact that California's unemployment rate only grew by .1 percent -- previous monthly hikes have been much larger. If the housing market is bottoming out, it's possible that California's unemployment rate might be nearing a peak. But when (or if) a new state budget is passed, drastic cuts in government spending are likely to result in government employee layoffs, so the worst could still be yet to come in the Golden State.

Whose fault is all this? Republican Minority Whip Eric Cantor, citing unemployment numbers, declared yesterday that "This stimulus plan has been a flop... This is President Obama's economy."

I think most economists would be hesitant to blame current unemployment figures on the Obama administration, but reality rarely has much success making inroads on political rhetoric. And the longer Obama is in office, the easier it will be to pin the current state of the economy on him.

But Cantor's rhetoric could end up boomeranging against him. Unemployment is well known to be a lagging indicator -- it continues to get worse after a recovery begins. There is enough evidence that the economic contraction is bottoming out to be reasonably confident that some kind of economic growth will resume by the end of this year or the beginning of next year. That implies that unemployment may peak, and start to improve, before the midterm elections in 2010. And of course, by Cantor's logic, Obama will "own" that economy, too.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Great Recession How The World Works Unemployment