Sedona AZ (March 22 2011)–Unemployment rose in nearly all of the 372 largest U.S. cities in January 2011 compared to December 2010. Unemployment rose in 351 metro areas, fell in only 16, and remained unchanged in 5. The U.S. Labor report indicates that metropolitan areas impacted by the housing crisis continue to struggle with high unemployment. The manufacturing sector, particularly U.S. auto companies, reported lower unemployment in a few small Midwest cities but the gains may not be permanent.

“The areas that have had very severe housing market corrections have shown the least improvement,” said Sophia Koropeckyj, managing director at Moody’s Analytics. California, Florida, Arizona and Nevada have shown the least improvement nationally with twelve of the 16 cities reporting January 2011 unemployment rates above 15 percent in California.

High foreclosure rates and falling home values contributed to high unemployment in the Riverside-San Bernadino-Ontario, California metropolitan area. Its unemployment rate of 14.2 percent is the highest of any U.S. city with populations of 1 million or more seconded by Las Vegas, Nevada with a metropolitan area unemployment rate of 13.7 percent.

The number of Riverside homes in foreclosure is double the national rate, Koropeckyj said. Moody Analytics forecasts that by mid-year 2011 home prices in the California city will drop 60 percent from peak levels before the recession.

In the year since January 2010, a few smaller manufacturing cities have shown some improvement in sky-high unemployment figures. The unemployment rate in Rockford, Illinois fell to just under 13.7 percent from 19 percent. Auto manufacturer Chrysler is investing $600 million in a Fiat auto plant near Rockford which will begin production in 2012, temporarily boosting construction jobs. It’s unknown if the Fiat plant will add permanent workers.

Kokomo, Indiana is the site of another expanding Chrysler plant. Kokomo officials reported a 7.1 percent increase in jobs in January 2011 compared to January 2010, however the city’s unemployment rate remains well above the national average.  The largest over-the-year percentage decrease in employment occurred in Yuma, Arizona (-3.2 percent), followed by Lawrence, Kansas and Napa, California (-2.6 percent each), and Sebastian-Vero Beach, Florida (-2.5 percent). Phoenix-Mesa-Glendale, Arizona unemployment rose 0.9 percentage points in January 2011 to 9.3% but the state of Arizona unemployment rose to 9.6%. The number of people unemployed in Phoenix in January 2011 is at a new high of 197,575.