Bedford jobless rate nears 10 percent

[Order this photo]

Bedford County's unemployment rate soared to 9.8 percent in January, according to preliminary figures released Thursday by the Tennessee Department of Labor & Workforce Development.

At this time last year, the county's jobless rate was at 6 percent and that means that over the past year, unemployment jumped 63 percent.

According to preliminary data released by the state agency, unemployment for the county jumped by 2.2 percentage points from December of 2008, when 7.6 percent were reportedly out of work.

Bedford County had a reported labor force of 22,530 in January 2009, with 20,330 employed and 2,200 out of work.

In January 2008, the county had a labor force of 22,250, meaning the county only had an increase of only 280 people eligible for work.

The county's rate is also 14 percent higher than the rate for the entire state, which was reported at 8.6 percent, 1.0 percentage point higher than the December rate of 7.6 percent. The January rate a year ago for Tennessee was 5.3 percent.

The United States unemployment rate for January was 7.6 percent but the February rate is expected to be 7.9 percent, which would be the highest since January 1984.

The unemployment rate jumped for all 95 counties in Tennessee and all counties also recorded over-the-year unemployment rate increases.

"Tennessee's labor market, as well as the national economic situation, has deteriorated quickly. We are seeing significant job losses in a very short time period," said Tennessee Commissioner of Labor & Workforce Development James Neeley.

"The recession is fully reflected in Tennessee's economy as broad declines are evident across most industries."

Neighboring Lincoln County and Knox County in East Tennessee registered the state's lowest county unemployment rate at 6.6 percent while Perry County had the state's highest unemployment rate at 27.3 percent, up from 20.1 in December, followed by Lauderdale County at 18.6 percent, up from 15.7 percent in December.

Knox County had the state's lowest major metropolitan rate of 6.6 percent, up 0.9 percentage point from the December rate. Davidson County was 7.0 percent, up 1.1 from the previous month.

Hamilton County was at 7.4 percent, up 1.0 percentage point from the December rate, and Shelby County was 8.6 percent, up from the December rate of 7.4 percent.

The Labor Department was scheduled to release a report this morning showing that February was an especially cruel month for America's workers.

Employers likely slashed a net total of 648,000 jobs last month, according to economists' forecasts. If they are right, it would mark the worst month of job losses since the recession started in December 2007. It also would represent the single biggest month of job reductions since October 1949, when the country was just pulling out of a painful recession, although the labor force has grown significantly since then.

"The pace of layoffs is fast and furious," said Stuart Hoffman, chief economist at PNC Financial Services Group. "We're still in the teeth of this recession and the bite has not let up at all."

With employers slashing payrolls, the nation's unemployment rate is expected to jump to 7.9 percent, from 7.6 percent in January. If that happens, it would mark the highest jobless rate since reaching 8 percent in January 1984, a time when the unemployment rate was still slowly moving down after having topped 10 percent during the early 1980s recession.

Employers are shrinking their work forces at alarming clip and are turning to other ways to slash costs -- including trimming workers' hours, freezing wages or cutting pay -- because the recession has eaten into their sales and profits. Customers at home and abroad are cutting back as other countries cope with their own economic problems.

A new wave of layoffs hit this week.

"This is basically cleaning house for a lot of firms," said John Silvia, chief economist at Wachovia. "They are using the first quarter to cut back employment and figure out what they want."

Disappearing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, driving companies to lay off workers. It's a vicious cycle in which all the economy's negative problems feed on each other, worsening the downward spiral.

"The economy is in a tailspin. Businesses are jettisoning jobs at an unprecedented pace," said Richard Yamarone, economist at Argus Research.

Some 3.6 million jobs have disappeared so far in a deepening recession, which is shaping up as the biggest job killer in the post-World War II period.

The country is getting bloodied by fallout from the housing, credit and financial crises-- the worst since the 1930s. And there's no easy fix for a quick turnaround, economists said.

President Barack Obama is counting on a multipronged assault to lift the country out of recession: a $787 billion stimulus package of increased federal spending and tax cuts; a revamped, multibillion-dollar bailout program for the nation's troubled banks; and a $75 billion effort to stem home foreclosures.

Even in the best-case scenario that the relief efforts work and the recession ends later in 2009, the unemployment rate is expected to keep climbing, hitting 9 percent or higher this year. In fact, the Federal Reserve thinks the unemployment rate will stay elevated into 2011. Economists say the job market may not get back to normal -- meaning a 5 percent unemployment rate -- until 2013.

Businesses won't be inclined to ramp up hiring until they are sure any economic recovery has staying power.

The economy contracted at a staggering 6.2 percent in the final three months of 2008, the worst showing in a quarter-century, and it will probably continue to shrink during the first six months of this year.

Fed Chairman Ben Bernanke told Congress earlier this week that recent economic barometers "show little sign of improvement" and suggest that "labor market conditions may have worsened further in recent weeks."