Unemployment Rate Dips Slightly : But Decline Signals a Slowdown of the Local Economy

Orange County’s unemployment rate dipped slightly in October to 4.3%, but layoffs in the high-tech and defense industries prevented the local economy from keeping pace with its torrid, job-creating performance of a year ago, the state Employment Development Department reported Wednesday.

Alta Yetter Gale, a department labor analyst, said the unemployment rate decline from September’s 4.4% masked a marked slowing of the county’s economy. In her monthly report, Gale said the number of jobs in the county declined by 300 between September and October to slightly more than a million and that October’s employment level was just 2.3% above that of a year ago.

The report drew a surprised response from James Doti, dean of Chapman College’s business school, who pointed out that Orange County’s job-creation rate had been running at about 4% until October. “The nation’s economic growth has been picking up and I question why it should be dropping in Orange County,” Doti said. “I would question the accuracy of the statistics.”

Gale attributed the decline to a variety of layoffs in the county, ranging from the 1,200 workers let go at Ford Aerospace when the Sgt. York anti-aircraft gun was canceled to a series of smaller job cuts throughout the computer and electronics industry.

Gale said the drop in the number of available jobs between September and October was the first in 15 years and a marked contrast to the average 6,700 new jobs created between those two months during the past five years. The September-to-October figures are considered important because October signals the beginning of the traditionally high-employment holiday season.

According to Gale, October employment figures for most sectors of the economy usually increase from September. However, this year, she said, most sectors either held steady at their September levels or declined.

For example, the manufacturing sector, which includes the struggling high-technology and computer industry, lost 1,600 jobs from September to October this year. Last year, about 1,000 jobs were added in the same period.

The service industry, a broad area that includes research and development companies, lost 2,100 jobs in the month this year, while holding steady last year.

Although neither Gale nor Doti ventured an explanation for the simultaneous decline of both available jobs and the jobless rate, one analyst suggested that the coincidence could mean that out-of-county residents, particularly those from Riverside and San Bernardino counties, were the workers affected by the string of recent layoffs at Orange County companies.