More Layoffs Held Likely in Defense Sector : July Jobless Rate of 4.4% Marks 2nd Monthly Rise

Just one day after a Defense Department decision to scrap the Sgt. York project left 1,900 jobs in limbo at Ford Aerospace & Communications Corp. facilities in Orange County, the state Employment Development Department has released even more discouraging news for local defense industry workers, including signals that yet more layoffs are on the way.

Among the bad signs in Wednesday’s monthly employment review was that July’s jobless rate of 4.4% was up one-tenth of a percentage point from June and marked the second consecutive monthly increase in the county’s unemployment rate.

The number of jobless residents in the county rose by 2,000 during July to a total of 58,400.

Wage and salary jobs at Orange County companies declined by 13,300 between June and July and the department now projects that the number of county workers in August could dip below the 1-million mark--a benchmark number that has been exceeded for four consecutive months.

Despite the rise in unemployment, Orange County still registered the lowest jobless rate in Southern California last month. The rate for Los Angeles County rose to 8.2% in July and the seasonally adjusted rate for the state was 7.2%. Orange County’s unemployment rate is not seasonally adjusted.

Still, claims for unemployment insurance in the county rose by nearly 1,300 in July, primarily because of layoffs at manufacturing firms, said Alta Yetter, a state labor market analyst. More manufacturing layoffs are expected in August and September, she said, adding that manufacturing industry hiring and firing is not seasonal, as it is in the agriculture and service industries.

Because they are not cyclical, the manufacturing layoffs are expected to have a longer-term impact on the county’s unemployment rate.

Feeling the brunt of the recent layoffs are defense-related companies, particularly in the aerospace and computer sectors.

Since January, the county’s aerospace sector has lost 2,200 jobs, although, because of increased hiring earlier in the year, the sector is down only 100 workers over the past 12 months; in the same period, computer manufacturing companies have laid off 1,700 people.

Even electronics and communications companies--which have basically stayed level since January--laid off 300 workers in July.

At the same time, employment in the county’s retail and service industries has continued to see solid growth, Yetter said.