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Uneven Pattern for Unemployment Rates Across U.S. Metros

Lincoln, Nebraska recorded a best-in-the-nation 3.4 percent unemployment rate in December as unemployment rates dropped in 290 of the 372 metropolitan areas in the county, the ""Bureau of Labor Statistics"":http://www.bls.gov/news.release/archives/metro_01302013.pdf (BLS) reported Wednesday.

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Three other metro areas reported unemployment rates of 4.0 percent or below: Lafayette and Lake Charles, Louisiana, at 3.7 percent each, and Sioux Falls, South Dakota, at 4.0 percent.

Forty-seven metro areas reported unemployment rates of 10.0 percent or higher, down from 70 metro areas one year earlier.

The highest unemployment rates in the country, according to the BLS report, were in Yuma, Arizona, and El Centro, California, at 27.3 percent and 25.5 percent, respectively. The unemployment rate in Yuma was up from 25.4 percent one year earlier, while the rate in El Centro represented an improvement from 28.1 percent in December 2011.

The BLS report reflected an uneven pattern of unemployment with metro areas, with unemployment rates above the national average generally clustered on the coasts while areas with unemployment rates below the national average dotting the midsection of the country.

There were, according to the monthly report, exceptions to the distribution. Four of the seven metro areas in Colorado, for example, had unemployment rates above the national average of 7.6 percent--led by Pueblo, where the unemployment rate was 10.5 percent--up from 9.8 percent in December 2011. On the other hand, four of California’s 26 metro areas had unemployment rates at or below the national average: San Francisco-Oakland, San Jose, San Luis Obispo, and Santa Barbara. At the other extreme, 15 metro areas in California had double digit unemployment rates in December, though all were down from one year earlier.

The unemployment rate is not necessarily the optimum measure of an area's economic strength since it is dependent on changes in the labor force. As discouraged workers re-enter the labor force as ""unemployed,"" the unemployment rate would increase, though those re-entrants were likely encouraged by an improvement in the job outlook.

Indeed, BLS also reported Wednesday 283 metro areas recorded year-over-year increases in non-farm payrolls, while 83 reported declines, and six had no change.

Unlike the unemployment rate which, is based on where members of the labor force reside, the report of payroll jobs is based on where the jobs are located. An unemployment rate for suburban communities depends largely on the jobs picture in the nearby urban area within commuting distance.

Payroll growth, BLS said, was strongest in the New York metro area, which added 118,700 jobs from December 2011 to December 2012, followed by the Houston metro area which, added 84,500 jobs, and Los Angeles-Long Beach with 83,200 new jobs.

BLS will report on national payroll jobs and the national unemployment rate for January on Friday.

_Hear Mark Lieberman Friday on P.O.T.U.S. radio, Sirius-XM 124, at 8:45 a.m. and again at 11:45 a.m. Eastern time._

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.
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