Jobless, States | featured news

An increase in hiring helped lower unemployment rates in 37 U.S. states last month, the latest indication that the job market is slowly healing.

The state is borrowing $40 million a day from the federal government to provide assistance to jobless workers, but has resisted changing the formulas it uses to determine and fund those benefits.California's fund for paying unemployment insurance is broke.

On the recession's front lines, governors are struggling to chart the road ahead for states staggered by unrelenting joblessness and cut-to-the-bone budgets even as Washington reports signs of economic growth.

"The worst probably is yet to come," warned Gov. Jim Douglas, R-Vt., chairman of the National Governors Association, at the group's meeting Saturday. He called the situation "fairly poor" in most states, adding that it "doesn't look too good."