Construction Spurt Helps Jobless Rate : May Figure of 3.5% Matches Record Low Set Last December

New construction projects and increased retail industry hiring combined to push the Orange County unemployment rate down to 3.5% last month. The rate was two-tenths of a percentage point lower than April’s mark and matched the record low set last December.

“Lower interest rates are stimulating construction,” said Alta Yetter, labor market analyst for the state Employment Development Department, which compiles the unemployment figures. The latest EDD report showed that half of the 3,600 new jobs created in May were in the construction industry, while retail employment rose 1,100 during the same period.

An additional 900 government jobs were added in May, which Yetter described as mostly tourist-related seasonal positions at parks and recreational areas. She said that increased employment at amusement parks, hotels and recreation areas during June would offset losses in school employment and the entry of new graduates into the labor market.

Statewide, Orange County tied with Marin County for the lowest jobless rate. Los Angeles County’s rate dropped six-tenths of a point during the month to 7%. The state’s unemployment rate declined to 7.1% in May, while the national rate remained constant at 7.3%.

(Unlike national and state figures, Orange County’s unemployment statistics are not adjusted for seasonal variations.)

Despite Orange County’s strong showing, some sectors of the local economy showed a decline. Income tax preparation firms laid off temporary employees after the April 15 filing deadline, which accounted for part of the service industry’s net loss of 200 jobs from April to May. Nonetheless, the May service industry figure was still ahead 5.8% from the same period a year earlier.

Yetter said that some manufacturing firms are hiring through temporary service agencies and when employees are laid off the employment drop shows up in the service category rather than manufacturing.

1,500 Jobs Lost

Still, layoffs at computer, electronics and aircraft companies led to a loss of 1,500 jobs in durable-goods manufacturing.

James Doti, director of Chapman College’s Center for Economic Research, attributed the drop to “the difficulty of our aerospace firms competing in the international markets when the dollar is so high,” as well as a slowdown in national economic growth. He predicted that construction and retail employment would remain high but that the rate of the county’s overall economic growth would decline as the national recovery loses its momentum.