The nation’s unemployment rate climbed to 7.5% in May, reaching its highest level in nearly eight years, and California joblessness rose to 8.7% as hopeful job-seekers poured back into the labor market but were unable to find work, the government reported Friday.
Although one federal survey showed the number of jobs growing slightly, the economic expansion was far too weak to accommodate the thousands of Americans who have begun looking for work again in response to reports that the economy is recovering.
Unemployment in Los Angeles County--after taking a steep drop to 7.1% in April--leaped back up to 9.8% in May. The April decline in the highly volatile county figure, however, was widely regarded as a statistical fluke.
May jobless figures for other California counties won’t be available until the end of the month. The April report released Wednesday showed Orange County with a 5.7% unemployment rate that, like the new U.S. figure, is an eight-year high.
State employment officials said 78,600 county residents were out of work in April. In addition, a companion report on jobs at businesses in the county showed that 65,000 positions have been cut from local payrolls since the recession began in July, 1990.
Analysts said a persistent downturn in the aerospace industry and the generally sluggish business climate caused Los Angeles County’s high rate.
The riots that raged in Los Angeles were only a minor factor, with fewer than 6,000 people filing claims for unemployment insurance or related financial aid because of riot-related job losses in May.
Economists estimate that up to 5,000 jobs may be lost permanently in areas where businesses were damaged or destroyed by looters and arsonists. While that would have a significant impact on hard-hit South Los Angeles, it is a comparatively tiny number in a county with a labor force of 4.52 million.
California’s jobless rate rose to 8.7%, from 8% in April, returning to the same level it had reached in February. Still, some economists said California’s recession is bottoming out--except in the Los Angeles area.
“The focal point of the trouble is down in Southern California, especially Los Angeles County,” said David Hensley, director of the UCLA Business Forecasting Project.
“It’s quite possible that the Bay Area is improving a bit, Sacramento is in between and Southern California . . . is doing the worst,” he said.
But there is still a considerable amount of uncertainty in measuring regional unemployment because state and county numbers--which are based on much smaller survey samples--are considered less reliable than the national figures.
For instance, it takes a movement of 0.7% or more in the state jobless rate for a change to be considered statistically significant, while on the national level, just 0.2% is required.
Throughout the United States, as unemployment rose from 7.2% in April, jobs were being created much more slowly than in a typical recovery after a business slump, William G. Barron, deputy commissioner of labor statistics, told Congress’ Joint Economic Committee on Friday.
Businesses are extraordinarily cautious in expanding their payrolls, a hesitancy that is apparently hampering the recovery. The average workweek at the nation’s factories rose to 41.3 hours last month, the highest level since 1966. The statistic provides strong evidence that managers are asking their employees to work overtime rather than hiring new workers, according to the Labor Department.
Democrats leaped on Friday’s discouraging news to issue strong election-year attacks on President Bush. “There’s a lot of hurt existing out there across the country,” said Sen. Paul S. Sarbanes (D-Md.), the Joint Economic Committee chairman.
“Unemployment is getting worse, and the President doesn’t realize it,” said House Majority Leader Richard A. Gephardt (D-Mo.). “We’ve got a President and an Administration who don’t get it.”
In Little Rock, Ark., Democrat Bill Clinton’s presidential campaign headquarters issued a statement in which the Arkansas governor took Bush to task.
“It’s his job to create jobs . . ,” Clinton said. “He’s just not doing it--and millions of Americans are suffering the consequences. . . . People are trading in $15-an-hour jobs with good benefits for $5-an-hour jobs with no health insurance.
“While Washington has stacked the deck in favor of a few, middle-class Americans are working harder for less money, spending less time with their kids and worrying that one accident or illness will bankrupt them.”
House Democrats predicted that the surprising jump in the national jobless rate will translate into more votes next week for a Democratic bill to extend jobless benefits and make permanent changes in the program, despite warnings that Bush may veto the legislation.
But the White House insisted that the employment figures will get steadily better. “I don’t think anyone questions the fact that the economy is improving in almost every sector . . . and it is going to recover in a positive fashion,” White House Press Secretary Marlin Fitzwater said.
The government’s closely watched monthly payroll survey, which is conducted separately from the unemployment report, showed a modest 68,000 increase in the number of paid workers. But the monthly survey of 47,000 U.S. households, on which the jobless rate is based, found that 117.6 million Americans were working in May, a decline of 19,000.
Meanwhile, the labor force--the number of people able and willing to work--jumped a hefty 330,000.
Unemployment totaled 9.5 million, an increase of 349,000; much of that occurred among people 16 to 24 years of age, “many of whom may be facing difficulties in getting jobs after the end of the school year,” Barron told the congressional hearing.
But there was also a disturbing increase in joblessness among experienced workers 25 and older, he noted.
The last time the jobless rate reached 7.5% was August, 1984, and there have not been as many as 9.5 million people out of work since October, 1983.
Technically, the national recession ended in the first quarter of this year, when the nation’s output of goods and services increased.
However, the sluggish recovery has made little progress in putting the long-term unemployed back to work. Last month, there were 3.4 million Americans who had been unemployed 15 weeks or more, the highest count in this category since November, 1983.
Los Angeles County, where unemployment peaked at 9.9% in February, is finding it hard to break out of a “recessionary pattern,” said Jay D. Horowitz, labor market analyst for the California Employment Department.
When previously discouraged workers decided things were looking better and went out last month to seek jobs, “what they found was that there weren’t jobs out there to be had,” he said.
The number of unemployed people in Los Angeles rose to 442,000, up from 124,000 in April. There were 4.08 million on the job, a decline of 89,000. May figures for other California counties were not immediately available.
One major sign of the weakness in Southern California turned up in the government’s payroll survey, a broad poll of employers. It showed that the number of payroll jobs in California fell 15,300 last month to 12,350,700, and that some of the hardest-hit categories are Southern California mainstays: guided missile and space vehicle firms and aircraft equipment manufacturers.
Rosenblatt reported from Washington and Silverstein from Los Angeles. Times staff writer Edwin Chen contributed to this story from Little Rock, Ark.
Out of Work
Unemployment in the United States reached 7.5% last month, the highest level in nearly eight years. Percentage of people unable to find work, by race, sex and age: Adult men: May 1991: 6.4% April 1992: 6.8% May 1992: 7.3%
Adult women: May 1991: 5.7% April 1992: 6.3% May 1992: 6.1%
Whites: May 1991: 6.0% April 1992: 6.3% May 1992: 6.5%
Blacks: May 1991: 12.8% April 1992: 13.9% May 1992: 14.7%
Latinos: May 1991: 9.7% April 1992: 10.3% May 1992: 11.3%
Teen-agers: May 1991: 18.9% April 1992: 19.2% May 1992: 20.0%
Black teen-agers: May 1991: 31.7% April 1992: 35.1% May 1992: 42.8%
Source: U.S. Bureau of Labor and Statistics