O.C.’s Jobless Level Hits 5.4%, Highest Since ’84

Orange County’s unemployment rate jumped to 5.4% in June, its highest level since February, 1984, the state Employment Development Department reported Monday.

The rise, from 4.8% in May, supports economists’ predictions that the county is in for a long, slow recovery from the 1990-91 recession that most believe recently ended.

In the 12 months since June, 1990--when Orange County’s jobless rate was only 3.3%--Orange County employers have slashed a total of 15,500 jobs from their payrolls, EDD labor market analyst Eleanor Jordan said Monday.

That 1.4% annual decline is the first net job loss for the county since the recession year of 1982, when the total number of jobs here dropped by 1.6%.

But economists caution that unemployment statistics, because they trail those of economic downturns, are better measures of what has already happened than of what is to come.

“It is quite possible that unemployment will continue to rise for a few months before the numbers start to turn around,” said David Brownstone, an economist at UC Irvine. “After all, the last thing a firm does is to lay off workers, but, unfortunately, once layoffs occur, it takes a while before the companies start hiring again.”

Most of the increase in the June unemployment rate for the county was because of the traditional seasonal rise of the jobless--largely students and teachers released for the summer--as the total number of county residents eligible for full-time work grew by nearly 14,000 to 1.37 million people.

At the same time that Orange County’s unemployment rate rose substantially, the number of jobs here increased slightly, 0.4% to 1,223,100, from 1,218,500 in May, Jordan said.

Like the rise in the unemployment rate, however, most of the increase in jobs can be accounted for by seasonal factors--principally increased summer hiring in retailing and businesses related to tourism.

There was little jobs growth during the month in the mainstream employment sectors. Manufacturing added only 100 jobs, and finance, insurance and real estate, only 600.

The biggest increase for the month was in retailing. Despite an increase of 2,700 jobs from May, however, the total for retail payrolls was still down by 3,900 from June, 1990.

The year-to-year figures, showing a decline coming at the beginning of the summer season, illustrates the recession’s impact, said Phillip Vincent, vice president and chief economist for First Interstate Bank.

Most of the jobs lost during the past year were from two industries. The construction trades lost 7,600 jobs here since June, 1990, representing a 10.6% cut in payrolls. That decline would have been worse but for the increases of 700 jobs in June and 2,200 in May after what had been nearly a year of steady declines. Manufacturing, hit by both the general recession and cuts in federal defense spending, pared 8,900 jobs from payrolls here--a 3.5% decline over the 12 months.

Unemployment Rate in Orang County 1988: 3.1% 1991: 5.4% Source: California Employment Development Department