Jobless Rate Dips to 8.5% in County : Economy: Services, manufacturing and construction show a modest increase in workers last month.

Ventura County’s jobless rate dipped to 8.5% in February, the lowest rate since May, as manufacturing, construction and service industries each showed a modest increase in jobs, state labor officials said Friday.

Despite the hopeful news, the head of the state employment department painted a gloomy portrait of the California economy in a speech in Oxnard on Friday, calling it the worst slump since the Great Depression.

The county’s jobless rate, which fell from 9.1% in January, followed the seasonal trend of rising employment in the early part of the year, according to figures released Friday by the state Employment Development Department.

Despite the improvement, the county’s unemployment remained higher than a year ago, when the rate stood at 8.1%, as employers reported the loss of 2,900 jobs over the 12-month period.

The county’s labor force fared better than workers across the state in February. California’s unemployment rate rose to a lofty 9.8% from 9.5% in January, the report showed. As a whole, the nation’s work force did better in February, with 7% unemployment, compared to January’s 7.1% rate.

In Ventura County, the number of jobs rose by 2,000 in February, evenly split between agriculture and non-agricultural sectors of the economy, according to the state report.

While 700 jobs disappeared during the month in retail trade, continuing the reduction of the holiday sales force, there were 400 more jobs in the service sector, 300 in manufacturing and 200 each in construction and wholesale trade.

During a visit to Oxnard Friday, Thomas P. Nagle--director of the state Employment Development Department--blamed California’s high unemployment on the collapse of an overheated economy and cutbacks in defense spending.

Speaking at an annual business outlook conference sponsored by the Ventura County Economic Development Assn., Nagle described the resulting slump as “the most prolonged economic downturn since the mid-1930s.”

While the typical recession lasts from 12 to 18 months, Nagle said the state is nearing the end of the third year of its current downturn.

“We had an economy that was overbuilt and financed with inflated interest rates, and as a result it left us with too much debt,” Nagle told the audience of Ventura County business and civic leaders.

Flipping quickly through a slide presentation on the state’s faltering economy and rising demand for state services, Nagle said Californians are unlikely to ever see the cheap land prices and housing that helped propel the state’s economy after World War II.

Nagle, who was appointed by Gov. Pete Wilson in 1991, said neither the federal nor state government can afford to bail out California’s economy. Instead, he urged the audience to support education and job training to produce a skilled labor force.

“We all have a vested interest in a highly literate and informed population,” said Nagle, who added that California spends $24,000 a year for each prison inmate but just $4,700 a year for each student.

The business leaders who attended the conference responded positively to Nagle’s address, but gave mixed reviews to the county’s business outlook.

Pat Zanuzoski, head of the Port Hueneme Chamber of Commerce, called Nagle’s description of the state’s dwindling tax base and rising demand for services “a rude awakening.”

Zanuzoski said some areas of the local economy appeared healthier than others, with restaurant sales and the used-housing market showing signs of improvement. “I guess that shows people still have to eat,” she said.

Anna Szabo, business manager of the Oxnard Area Chamber of Commerce, said she was thankful to Nagle for emphasizing the problems in the state workers’ compensation system and educational funding. “I find it shocking that we spend $24,000 a year on prisoners but only $4,700 on students,” she said.

Szabo does not see a quick end to the county’s economic malaise.

“I hear a lot of gloom and doom from our smaller businesses,” Szabo said. “They are really suffering.”