WASHINGTON -- Unemployment rose in nearly all of the 372 largest U.S. cities in January compared to the previous month, mostly because of seasonal changes such as the layoff of temporary retail employees hired for the holidays.
The Labor Department said Friday that the unemployment rate rose in 351 metro areas, fell in only 16, and was unchanged in 5. That's worse than December, when the rate fell in 207 areas and increased in 122.
Other seasonal trends, such as the layoff of construction workers due to winter weather, also contributed to the widespread increase.
Nationwide, the unemployment rate dropped to 9 percent in January from 9.4 percent the previous month. It ticked down to 8.9 percent in February. But the national data is seasonally adjusted, while the metro data isn't, which makes it more volatile. The metro data also lags the national report by one month.
The report shows that metro areas hit hard by the housing crisis are still struggling with high unemployment. At the same time, a strong recovery in the manufacturing sector, particularly among U.S. auto companies, has bolstered many smaller cities in the Midwest.
"The areas that have had very severe housing market corrections have shown the least improvement," said Sophia Koropeckyj, managing director at Moody's Analytics. That's particularly true for states such as California, Florida, Arizona and Nevada. Twelve of the 16 cities with unemployment rates above 15 percent in January were in California.
A high foreclosure rate and falling home prices are contributing to sky-high unemployment in the Riverside-San Bernardino-Ontario, Calif. metro area. Its unemployment rate of 14.2 percent was highest in the nation among cities with populations of 1 million or more. The second-highest was Las Vegas, with 13.7 percent.
The number of homes in foreclosure in Riverside is double the national rate, Koropeckyj said. And Moody's forecasts that home prices in the city will drop 60 percent from peak levels before the recession by the middle of this year.
