California, L.A. Economies Still in Slump’s Grip


Despite the improving job picture nationally, California--and especially the Southland--continues to suffer from a stubborn economic slump, new employment figures released Friday show.

The jobless rate in Los Angeles County, climbing for the third month in a row, returned to its recessionary high of 11.2% last month--up from 10.4% in January, the government reported. Meanwhile, unemployment statewide rose to 9.8% in February, up from 9.5% the month before.

Employment climbed throughout California and in Los Angeles County during February, but jobs were added too slowly to handle the influx of new and returning job hunters to the labor market.

Even though that type of scenario--rising employment and an expanded pool of job hunters--often is an early sign of a recovery, economists said the situation still is grim in California.

“I don’t see us jumping into the party that the rest of the country seems to be having,” said Ted Gibson, economist with the California Department of Finance, citing last month’s strong job growth nationally and the decline in the U.S. jobless rate to 7.0%.


He added: “In California, especially in Southern California, we have to live with the reality of the defense budget. We’re going to have defense cutbacks” for years to come.

The Economic Development Corp. of Los Angeles County estimates that the state will lose 115,000 jobs at aerospace plants in 1993 and 1994, including 48,000 in Los Angeles County alone. Additional jobs are expected to be lost in communities near military bases destined to close.

Last month, a big employment increase in service trades was partly offset by the continuing losses in aerospace and related fields, along with the long-running downturn in retailing.

Economists said California stands to benefit from the recent declines in interest rates, which are expected to spur home building and related industries in the state. Still, Gibson said, “our best hope . . . is that we’ll see some stability” later this year.

In addition, economists in California and across the country express concern that many of the new jobs being created are part-time or temporary positions that do not provide the pay or benefits of the jobs being eliminated.

Of the 11 big states whose jobless numbers were released, California’s unemployment rate of 9.8% was by far the highest, followed by New York’s 8.0%. By some estimates, the state has lost more than 800,000 jobs since employment was at its peak in mid-1990.

Los Angeles County’s jobless rate is now back to the same level where it stood in July. The last time the county’s jobless rate was higher was 10 years ago, in February, 1983, when unemployment was 11.5%.

Although the county figures are volatile due to the relatively small sampling of nearly 2,000 households they are drawn from, “this unemployment rate in the double-digits is probably a fairly true indicator of what is out there,” said Jack Kyser, chief economist for the Economic Development Corp., a nonprofit agency.

The most optimistic sign in the county figures was the gain in employment, which rose by 61,000 in February to more than 4.03 million. Over the previous three months, employment had fallen by 148,000 jobs.

But due to the influx of new job hunters, the number of unemployed in the county also climbed 48,000 last month to 510,000. In February, 1992, the jobless rate was 9.9%, with employment at 4,098,000 and 451,000 unemployed.

Los Angeles County is the only metropolitan area in the state whose employment figures are released as soon as the state and national figures are issued.

Statewide, the government’s survey of roughly 4,750 households showed employment rising by 98,000 to 13.9 million. At the same time, the number of unemployed people rose 65,000 to 1.51 million.

February’s rise in unemployment brought the state jobless rate close to the recessionary peak of 10% that it hit in November.

A separate employment survey--based on employer payrolls and not adjusted for seasonal trends--found that the number of jobs in the state climbed 34,600 to 11.92 million in February. The big gainer was the service sector of the economy, which includes everything from hotels to Hollywood. It posted an increase of 33,300 jobs.

The big loser was retailing, which was down 25,300 jobs, at least partly because many holiday shopping season hires are laid off in February. The next-biggest loser was durable manufacturing, which includes such areas as aerospace and high technology and which dropped by 5,200 jobs.

Kyser said improvement in service industries may have boosted the hopes of many unemployed workers and contributed to the increase in the number of people looking for work.