Jobless rate in the West tops 10 percent in May

The housing bust sent the unemployment rate in the West bolting past 10 percent in May -- the first time in more than 25 years that a region of the United States has suffered double-digit joblessness.

A Labor Department report released Friday showed the West absorbing the worst of the recession, which is now the longest since World War II. California, Nevada and Oregon endured particularly heavy job losses in construction, manufacturing and tourism.

The region has been pounded because it was the epicenter of the housing boom that collapsed. As home values plummeted, the West lost jobs and wealth, and consumers grew skittish about spending.

"The West is where houses are being abandoned most quickly because it has the largest percentage of the population under water -- owing more on their houses than they're worth," said Robert Reich, labor secretary under President Bill Clinton and now a professor at the University of California, Berkeley. "They lose their capacity to borrow. All of that means that they can't buy very much."

The West reported the highest regional jobless rate for May: 10.1 percent. The last time any region had an unemployment rate of at least 10 percent was in September 1983, when the economy was emerging from a severe recession.

The region's problems also go beyond housing. Cutbacks on businesses travel are hitting hard in Arizona and Nevada.

"It's difficult to keep major projects going -- like casinos -- in Las Vegas. That's pretty much come to a halt," said Steve Cochrane, managing director at Moody's

In California, the jobless rate jumped to 11.5 percent last month. In Nevada, it rose to 11.3 percent, and in Oregon, to 12.4 percent. All three figures were records, based on documentation going back to 1976.

After the West, the Midwest had the second-highest unemployment rate, at 9.8 percent. The South's jobless rate was 8.9 percent. The Northeast had the lowest, 8.3 percent.

The government report showed employment conditions deteriorating in 48 states and the District of Columbia last month.