State’s job losses fan recession fear
Here’s more evidence that California is losing its struggle against recession: The state shed 20,300 jobs in January, more than the other 49 states combined for the month, a government report showed Friday.
That comes on top of more bad news. California’s job engine sputtered nearly to a halt last year, adding just under 15,000 positions, or 0.1%, to the state’s payrolls, according to the Employment Development Department’s revised annual figures, also released Friday.
The state’s job losses in the first month of the year swept across several sectors, with construction, information and financial services among the hardest hit.
In Los Angeles County, strain from the Hollywood writers strike was apparent. Nearly 20,000 of the 75,800 jobs that disappeared in the county in January were in the information category, which includes film-industry and sound-recording workers.
The slump is taking its toll on people such as Gabriele Larmon of Port Hueneme, who was laid off from her administrative university job more than two years ago. Larmon’s insurance is set to run out this month, and she’s been unable to find a new job in academics or to get new insurance.
“I’d just like to get my foot in the door for anything,” said Larmon, 52, who estimates that she’s applied for 600 to 700 positions online in the last year. “I don’t know if it’s my age, but I just can’t get a job.”
Larmon said she had to move in with her daughter because she could no longer make her mortgage payments and the bank refused to renegotiate the terms. “Everything has just fallen apart,” she said.
In all, 15.2 million people were employed in California in January. The state’s unemployment rate held at 5.9%, unchanged from December’s revised rate and up from 5% in January 2007.
The figures show California’s hard-hit home-construction sector was a drag not only on the state economy but also figured prominently in the U.S., posting its first job losses in more than four years in January.
The U.S. economy as a whole dropped a net 17,000 jobs during the month -- fewer than California alone, meaning that California’s losses were offset by gains elsewhere. The nation’s unemployment rate edged lower to 4.9% in January from December’s 5%.
Economists said the latest figures showed that the state economy was sluggish at best and might be headed toward recession.
“These estimates, combined with the latest national economic news, confirm that the state has entered a period of slow or negative economic growth that is likely to persist for at least a few months,” said Steve Levy, an economist with the Center for Continuing Study of the California Economy.
A separate forecast issued Friday projected worsening doldrums for Southern California over the next six months. The index of leading economic indicators for the region declined by 0.7% in the last quarter of 2007, following a 0.5% drop in the previous quarter.
The fourth-quarter decline was the steepest since the indicator was created in May 2000, the eve of the last recession, said Adrian Fleissig, the Cal State Fullerton economist who compiles the index.
“There is now no doubt that economic activity in the Southland has slowed down and is likely to continue to slow down in the next three to six months,” he said.
The state’s revised benchmark employment figures released Friday -- enriched by more detailed and accurate data available in hindsight -- were particularly troubling, said Esmael Adibi, an economics professor at Chapman University.
Toward the end of last year, he said, growth slowed even further to “practically zero,” Adibi said.
The revisions show that some areas had been hit harder than others, he added. San Francisco and San Jose were posting slim gains through the end of last year, while Los Angeles County began losing jobs in November.
Orange County posted two consecutive quarters of job loss in the first half of 2007, and the Inland Empire had two negative quarters in the second half of the year.
“If this lasts a couple of quarters, California as a whole is, by definition, going to be in a recession,” Adibi said, adding that he expected statewide unemployment to hit 6.3% by year-end. “It is a very grim forecast.”
For all of 2007, the collapse of the housing market cost California 69,300 jobs in construction, the hardest hit sector, according to the Employment Development Department’s annual revision of state employment numbers. The finance sector, which includes mortgage lending, was the victim of collateral damage, losing another 35,300 jobs. And manufacturing continued its decade-long slump, shedding 23,600 jobs.
The administration of Gov. Arnold Schwarzenegger announced Friday that it would spend $10.5 million over the next few months to retrain laid-off residential construction workers for new jobs building roads, hospitals, power plants and other major projects.
State Labor and Workforce Development Agency Secretary Victoria Bradshaw acknowledged that the latest unemployment figures “made it clear that the housing industry is still having difficulty.”
The state and federal funding would be used to “aggressively identify the skills of those leaving jobs and match them with the skills of individual construction sectors that are growing,” Bradshaw said.
Many jobs could be created as the state sells some of the currently approved $42.5 billion of infrastructure bonds, Bradshaw said. Each $1 billion in spending translates into about 18,000 new jobs, she said.
An initial $5 million would be spent on job fairs, transitional training and outreach while the remaining funds would pay for specialized programs with particular employers, Bradshaw said.
“We’re not going to wait until employees find us. We’re going to mine unemployment data to find employees with the skill sets so we can capitalize on California’s human assets and not lose those simply because of the slump in housing,” Bradshaw said.
Information about the new programs would be available next week at local offices of the California Economic Development Department and on the Internet at www.edd.ca.gov, she said.
The economy’s slowdown is making it harder for many people to find jobs. Guillermo Morales spent four months, sent out more than 50 resumes and told friends and members of his church that he was looking.
“I was so discouraged, I was planning to go back to Guatemala,” said the 22-year-old Rowland Heights resident who ultimately landed a job in January as a health access coordinator with Children’s Hospital of Orange County.
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ken.bensinger@latimes.com
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Times staff writers Marc Lifsher in Sacramento and Molly Selvin in Los Angeles contributed to this report.
