Job Losses Surge as U.S. Downturn Accelerates

Rising unemployment across the nation reveals a pervasive downturn that is spreading at an accelerating pace.

In data released Friday by the Bureau of Labor Statistics, 12 states, including Florida, Idaho, North Carolina and Illinois, reported a rise of at least two percentage points in unemployment rates over the past year.

For many states, the pace of decline is more severe than during the 2001 recession. Job losses have spread beyond construction and manufacturing to service sectors such as tourism, hospitality and professional and business services.

"It's remarkable how fast the unemployment rate is increasing" in several states, said Luke Tilley, a senior economist at IHS Global Insight. "We are now seeing the full ripple effects."

In October, month-over-month unemployment rates increased in 38 states and the District of Columbia. Unemployment rates held steady in seven states and fell in five. Many economists forecast the national unemployment rate, currently at 6.5%, will top 8% in the next few months.

The weakest states are those with concentrations of construction and manufacturing jobs. Michigan and Rhode Island, both heavily dependent on manufacturing, posted October unemployment rates of 9.3%, highest in the nation. Ohio's rate rose to 7.3% from 7.2% in September.

Unemployment generally was higher in Western states, which have been hit particularly hard by the housing bust, and the Midwest, which continues to bleed manufacturing jobs. But joblessness affected the entire country, even touching energy-producing states that had been resilient up to this point.

Florida has lost 156,000 jobs over the past 12 months, but the weakness has spread beyond the state's housing industry. About half the losses were in the construction sector, but the state also lost 47,000 jobs in the professional and business service sector, 38,000 in trade, transportation and utilities, and 20,000 in manufacturing.

Unemployment rose throughout the Sunbelt, as falling home prices and surging foreclosures continued to weigh on employers. Florida and Georgia both posted unemployment rates of 7%, while Nevada's rose to 7.6% and California to 8.2%.

While Sunbelt states have been buffeted by the housing bust and subsequent falloff in consumer spending, they may have further to fall. In Florida, Arizona and Nevada, construction jobs account for between 6.5% and 9.4% of employment, compared with 5.3% nationally, according to economists at Goldman Sachs. An exception is California, where construction employment is now in line with the national average.

Energy states remain the lone bright spot, but not necessarily for long. Wyoming and South Dakota had the lowest unemployment rates in the nation, at 3.3%. North Dakota's unemployment rate fell to 3.4%. Falling energy prices have removed an economic buffer from many of those states. Unemployment rose 0.5 percentage point to 5.6% in Texas; in Oklahoma, the rate rose to 4.3% from 3.8% last month.

Write to Conor Dougherty at conor.dougherty@wsj.com