Effects of Recession, Defense Decline Raise S.D. County Jobless Rate to 6.8% in January
San Diego County’s unemployment rate bumped up to 6.8% in January, an increase that reflected the persistent effects of the recession as well as the adjustments that local defense contractors are making to the end of the Cold War.
Figures released by the state Employment Development Department also showed that total non-agricultural, salaried and wage jobs in the county dropped to 967,600 in January, nearly 20,000 fewer jobs than there were in January, 1991.
The January unemployment rate, which compares with 5.7% joblessness the previous month and 6.3% in January, 1991, is partly due to seasonal factors. Many of the retailers who hired additional employees for the Christmas shopping season have downsized, state EDD labor market analyst Lucille Sullivan said Wednesday.
But, combined with other economic indicators, the statistics provide evidence of how stubborn the recession has proven. Retail sales and construction permit statistics remain weak, and the average January price of a resold house in the county was $216,700, a drop of $13,500 from the $230,200 average in January, 1991, the San Diego Assn. of Realtors said Wednesday.
Chris Marusin, research coordinator at SDSU’s Center for Public Economics, said the increase in unemployment is a sign of “all the shifts in defense spending, with the local military--industrial complex changing its orientation. A lot of these companies here in town are going to have to shift production to more peaceful means.”
Insofar as San Diego’s economy is tied to California trends, unemployment here may worsen before it improves, said Ross Starr, economics professor at UC San Diego. Starr cited a UCLA Business Forecasting Project prediction that statewide unemployment will peak at 8.9% in early 1993.
“What this reflects is a weak California economy, particularly in military procurement and commercial real estate construction,” Starr said. “The good news is San Diego is not so dependent on those two segments as the rest of the state. The bad news is that the recession is hitting San Diego and the state later and is going to stay longer than in the rest of the country.”
San Diego’s unemployment rate in January was still better than the statewide and nationwide rates for the month, which were 8.5% and 8.0%, respectively.
Max Schetter, economic research chief at the Greater San Diego Chamber of Commerce, cautions that employment statistics are a “lagging indicator” of economic health, meaning that an improvement in jobs usually lags behind general economic improvement because employers wait to hire until they are sure that an economic rebound is for real.
“The anecdotal information I’m getting is that things are picking up in things like hotel reservations and housing market activity,” Schetter said, adding that the chamber is forecasting an economic recovery by the second half of 1992.
“There’s not enough evidence that would indicate we are definitely on the road to recovery, but typically you don’t really know it until it’s happened,” Schetter said.
The statistics released Wednesday offer little encouragement to economists and other observers, however. The EDD’s Sullivan said total construction jobs in the county were down by 4,300 over the 12-month period ending January. Retail trade jobs declined by 6,100 over the same period, and finance, insurance and real estate jobs were down by 2,800.
San Diego County Unemployment Rate
1992 January 6.8% 1991 January 6.3% February 6.3% March 6.3% April 6.1% May 6.4% June 7.1% July 7.0% August 6.0% September 6.2% October 6.3% November 5.6% December 5.7% 1990 January 3.8% February 3.7% March 3.4% April 3.9% May 4.4% June 4.4% July 5.0% August4.3% September 5.2% October 4.7% November 5.5% December 5.4%
Source: California Employment Development Department
