Connecticut one of 17 states where unemployment rate fell in July

WASHINGTON (AP) — A rebound in the auto industry and federal stimulus money helped lower unemployment rates in many of the 17 states, including Connecticut, that re­ported drops in July— a hope­ful sign after only five states had seen their jobless rates dip in June.

Still, the Labor Department report Friday showed that job­lessness remains widespread as 26 states reported higher unemployment rates. Many economists expect jobs to re­main scarce nationwide and the unemployment rate to top 10 percent by the end of the year, up from 9.4 percent in July.

Fifteen states and the Dis­trict of Columbia are suffering from unemployment rates above 10 percent. Michigan’s rate was 15 percent in July, down from15.2 percent in June — the first time any state’s job­less rate had topped 15 percent since 1984.

The states with the next highest jobless rates in July were: Rhode Island, at 12.7 per­cent; Nevada, 12.5 percent; Cal­ifornia, 11.9 percent; and Ore­gon, also at 11.9 percent. Four reached state record highs: Rhode Island, Nevada, Califor­nia and Georgia.

But the report also showed that 21 states added jobs last month, compared with only 10 in June. Some states, like Texas, added jobs but still saw their unemployment rates in­crease. That tends to happen as more jobless people enter the work force.

“This is just a further indica­tion that the worst is over and the recession is coming to an end,” said Gus Faucher, an economist at Moody’s Econ­omy. com.

Faucher said the Obama ad­ministration’s $787 billion package, which helped pay many states’ Medi­caid and other costs, allowed many state governments to avoid laying off more workers. “The question is, will the economy be strong enough to sustain the expansion once the stimulus starts to fade?” he said.

New York state added 62,100 jobs, the most of any state, and saw its unemployment rate drop to 8.6 percent from 8.7 percent.

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