Jobless Rates Falling All Over as Signals Mixed


In a sign that the state’s recession could be bottoming out, California’s jobless rate tumbled half a percentage point in April to 8%, government officials reported Friday, while the U.S. rate fell for the first time in nine months, to 7.2% from 7.3% in March.

Los Angeles County’s unemployment rate plunged dramatically during April, to 7.1%, down from 9% the month before. But many analysts, noting the volatility of state and local statistics, called the decline a statistical fluke.

Most economists maintain that California--particularly Southern California--continues to lag behind the nation in its slow recovery.

In addition, analysts noted that employment losses resulting from last week’s rioting in Los Angeles were not reflected in the April statistics. They also said that more jobs are expected to be lost soon because of the Bank of America-Security Pacific merger and the continuing cuts in the state’s huge defense industry.


“If anything was getting started here, it could be quickly swatted down by what happened last week,” said David Hensley, director of the UCLA Business Forecasting Project, referring to the riots.

Nationally, the improvement in the job picture was helpful but far from robust, according to William MacReynolds, director of forecasting at the U.S. Chamber of Commerce. “It appears that the economy needs to be growing faster, and the Federal Reserve Board can use this as a reason to reduce interest rates,” said MacReynolds, suggesting that the lower rates will stimulate business and consumer borrowing, which, in turn, will generate more jobs.

Ted Gibson, economist for the California Department of Finance, said the national figures “give you some grounds for modest encouragement, that things are moving. But we just don’t see it yet in California.”

Still, even in California, “the worst is behind us,” said Joseph Wahed, chief economist for Wells Fargo in San Francisco.


Lynn Reaser, chief economist for First Interstate Bancorp, noted that California has gained an average of 1,000 jobs a month during the first four months of this year, according to the federal government’s survey of large employers. During the last four months of 1991, the state lost an average of 38,000 jobs a month.

Nationally, employment growth last month was largely in the service sector, which added 135,000 jobs, the biggest monthly increase since June, 1990. Manufacturing and construction figures were virtually unchanged from March.

Overall, there were 117.7 million Americans working last month, a gain of 327,000. There were 9.2 million unemployed, a drop of 87,000. The two batches of figures released Friday for California painted somewhat contradictory pictures of the state economy. The monthly survey of 5,000 California households--the survey used to determine the unemployment rate--found that 13.7 million people were working in April, a drop of 43,000 from March.

But the number of unemployed fell 77,000 to 1.2 million because the labor force--the number of people willing and able to work and actively seeking employment--also declined. With fewer people in the job market, the unemployment rate fell.

On the other hand, the monthly survey of large employers in California showed a modest gain of nearly 12,000 jobs. Increases in retail, wholesale and health care employment offset losses in manufacturing.

In Los Angeles County, the April jobless rate of 7.1% continues a slide from its peak of 9.9% in February. It is now at its lowest level since March, 1991.

But economists were baffled by the decline. “It’s hard to make anything of this. It looks like, ‘Oh, my God, the recession has ended, and we’re on our way to easy street. But we really have to see three months of similar numbers before we can say there’s a definite trend,” said Jay D. Horowitz, labor market analyst for the California Employment Development Department.

Although some economists said the report reflected a strengthening job market, many others attributed the reported improvement to statistical quirks due to the small survey on which the numbers are based. “I don’t think anyone believes it at this point,” Gibson said.


Unlike the national and state figures, the county unemployment statistics are not adjusted for seasonal trends.

According to the official figures, the number of jobless people in Los Angeles County fell 85,000 to 318,000 in April. The report said employment grew by 109,000 to nearly 4.2 million people working in the county, and the overall labor force expanded by 24,000 to almost 4.5 million.

Rosenblatt reported from Washington and Silverstein from Los Angeles.