Jobless Rate Up in State Amid Hopeful Signs
The California jobless rate soared to 7.4% in February--the highest level since October, 1985--but some economists say other employment figures released Friday may offer a glimmer of hope in an otherwise bleak economic picture.
The rate increased from 7% in January, meaning that another 60,000 Californians were out of work, bringing total unemployed to about 1.1 million, according to state figures. By comparison, 720,000 people were unemployed in February of last year.
The federal government also reported a surge in the national unemployment rate in February. As the recession deepened and the economy lost another 185,000 jobs, the national rate for the month jumped to 6.5%, from 6.2% in January.
The new figures brought the number of Americans out of work to 8.2 million, the highest level since March, 1987, prompting the Federal Reserve to take steps to lower the key federal funds rate--the interest fee that banks charge each other on overnight loans. The new rate is 6%, down from 6.25%.
While many expect the end of the Persian Gulf War to boost consumer confidence and the economy, the effect has yet to be seen in many California industries. Manufacturing, for example, lost 10,000 jobs, and the retailing sector shrank slightly from January.
Despite the sharply higher unemployment rate, a separate government survey of businesses suggested some reason for optimism in California. Based upon wage and salary information provided by employers, the number of workers employed outside agriculture actually rose slightly in February over the previous month.
Many industries that have shown heavy job losses in past months also grew slightly or held their own in February, compared to January, according to the survey. The construction field, which has lost more than 30,000 jobs during the last year, stabilized at about 644,900 jobs. The state’s services sector also added more than 10,000 jobs.
“It may be that the economy may be more resilient than I realized,” said David Hensley, who follows the California economy at the UCLA Economic Forecasting Project. “I want to stay with my gut feeling that the state is not out of the woods. But it’s harder to make that case,” given some of the employment figures.
“Having the war resolved on such a high note has been very good in the initial data that we have seen,” said Leslie Appleton-Young, vice president of research and economics at the California Assn. of Realtors. “We are seeing fairly large gains in pending sales recorded by local boards of realtors.
“We will actually start to dig ourselves out in March and April,” once sales have become final, Appleton-Young said.
Despite the positive economic signs, there was little cheer Friday at one state Employment Development Department office in Los Angeles. Ildelisa Urena was completing her application for unemployment insurance after failing for six months to find work as a hotel housekeeper or seamstress. Her husband, a construction worker, found work only recently after five months of being unemployed.
“I didn’t think it would be this hard to find work,” said Urena, 31. “It’s hard right now; everything is so slow.”
For Los Angeles area aerospace workers, many of whom built the high-tech weaponry used in the Gulf War, finding work is “getting harder, much harder,” said Ray Carillo, business representative for District 720 of the International Assn. of Machinists.
“I had a young lady laid off from McDonnell Douglas. She has been out of work for six months and she says it’s very hard to find a job,” Carillo said. “The companies are not really calling anybody back as far as we know.”
Some economists believe that unemployment figures may continue to worsen before they get better.
“People are still frightened about the economic prospects,” said Jack Kyser, chief economist at the Los Angeles Area Chamber of Commerce. “If people are unemployed and making demands on social services, you are not looking for much life in the retail sector and retail sales taxes. There are a lot of ramifications from these numbers.”
The end of the war will not reverse all of the losses the economy has suffered since the Iraqi invasion of Kuwait last August, said Howard Roth, chief economist at Security Pacific National Bank.
“We are optimistic,” Roth said. “But the end of the war won’t get us back to July. A lot of people have lost their jobs.”
AMERICA’S JOBLESS: The nationwide jobless rate rose in February to 6.5%. D1
