State Jobless Rate Jumps to 9.8%; U.S. Figure Rises : Economy: Extended California slump is seen. Nation’s 6.8% level is attributed to an influx of new job seekers.

California’s unemployment rate climbed to 9.8% in October, up from 9.4% the month before, as the state’s manufacturing and retailing job losses kept mounting, government officials reported Friday.

Nationally, the jobless rate also rose, inching up to 6.8% from 6.7% in September. But analysts noted that the U.S. economy actually expanded last month, adding 177,000 jobs, and they attributed the rise in unemployment to an influx of new job hunters who swamped the labor market.

The state’s jobless rate remained the highest among the 11 major industrial states whose unemployment levels were reported Friday. Next came New York, where joblessness jumped to 7.9% from 7.1% the month before. North Carolina posted the lowest rate, 4.8%, up from 4.2% in September.

California’s unemployment rate has risen for two consecutive months and now is back to where it stood in July, and just below the recessionary high of 10.1% last November.

“The nation has been in a recovery for more than two years, but we (in California) continue to be in a downturn,” said Frederick Cannon, an economist with Bank of America.

Gary Schlossberg, an economist with Wells Fargo Bank, said the best news about the state economy is that it may be “getting close to a bottom. And after what we’ve been through, that would be good news.”

Schlossberg cited signs of improving home and retail sales in California. Still, he said he expects the state’s job market to suffer through much of 1994 because of layoffs at defense contractors, banks and government agencies.

Employment figures for Los Angeles County showed a dramatic loss of 95,000 jobs during October, but analysts maintained that the decline was largely a statistical fluke. And the rate of unemployment actually fell slightly for the month.

The big rise in job hunters nationally, economists said, reflected improving business conditions that inspired previously discouraged workers to resume the search for employment. “It’s one measure of confidence that they are out pounding the pavement again,” said Ken Goldstein, an economist in New York with the Conference Board, a business research group.

For the nation, the figures released Friday by the U.S. Labor Department reflected an array of encouraging signals. The closely watched survey of employer payrolls showed the 177,000 gain in jobs, a slight pickup in the rate of employment growth recorded so far this year.

Even manufacturing employment, which had declined every month since February, chalked up a job gain of 12,000. Major increases also came in construction and health services.

At the same time, other figures reflected the reluctance of employers to add new permanent workers to their payrolls. For one, the most dramatic area of employment growth last month came in temporary help, which was up by 69,000.

Other employers apparently lengthened employee workweeks instead of adding new staff. The average factory workweek climbed to 41.6 hours, equaling the post World War II record set in 1966, and factory overtime hit an all-time high.

Consequently, analysts see little hope of dramatic increases in permanent jobs for currently unemployed American workers.

Still, the upbeat signs in the national employment report stirred Wall Street. The Dow Jones industrial average rose 18.45 points Friday, reversing a two-day slide. Concerns that a strengthening economy would lead to higher interest rates also continued the selloff in the bond market.

President Clinton conceded there might be “a little pickup” in interest rates as the economy gains strength, but said he is “not alarmed by it.”

Declaring that the economy “is getting much healthier,” the President said “it’s hard to keep interest rates at a 25- or 30-year low.” Deputy Treasury Secretary Roger Altman said the report signals that the U.S. economy will grow more than 3% in the fourth quarter of 1993, up from 2.8% in the third quarter.

For California, however, the employment statistics were discouraging. A rise in the number of job hunters contributed to the higher unemployment rate, as it did nationally.

But the state, according to the payroll survey, also lost 14,200 jobs during the month, mainly in the hard-hit manufacturing and retailing sectors. Over the last 12 months, job losses have totaled 86,000 in manufacturing and 41,700 in retailing.

On the other hand, the service fields gained 9,700 jobs, and modest increases also came in the government, transportation and public utilities, mining and finance categories.

Los Angeles County’s employment figures, often volatile because they are drawn from a small survey of households, gave mixed signals for October. The county’s jobless rate--which, unlike the state and national figures, is not adjusted for seasonal trends--edged down to 9.6%, from 9.7% in September.

But the improvement stemmed from a sharp decline in the labor force, defying the national and state pattern of growing labor forces. Such a decline normally indicates that people either have moved away or quit looking for jobs.

The 95,000 drop in employment reported for Los Angeles County last month brought the job total to 3.96 million, the lowest level since August, 1991. At the same time, the number of unemployed fell by 12,000 to 421,000.

Still, analysts downplayed the county’s reported one-month drop in employment. “Some of it is attributable to statistics, and some of it is attributable to a real decline” in the economy, said Robert J. Schrage, Los Angeles area research manager for the California Employment Development Dept.

This year, the county’s jobless rate has ranged from a high of 11.2% in February to a low of 8.8% in August.

Jobless Rates

Here are U.S. and California unemployment rates, in percentages, over the last year:

U.S. Calif. Oct. 6.8 9.8 Sept. 6.7 9.4 August 6.7 9.0 July 6.8 9.8 June 7.0 9.1 May 6.9 8.7 April 7.0 8.6 March 7.0 9.4 Feb. 7.0 9.8 Jan. 7.1 9.5 Dec. ’92 7.2 9.8 Nov. 7.2 10.1 Oct. 7.3 9.8

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INDUSTRIAL STATES

The unemployment rates for 10 other major industrial states besides California:

Oct. Sept. Florida 7.1 6.4 Illinois 7.8 8.5 Massachusetts 6.9 7.2 Michigan 6.9 6.7 New Jersey 6.5 7.7 New York 7.9 7.1 North Carolina 4.8 4.2 Ohio 6.6 7.3 Pennsylvania 7.0 6.9 Texas 7.5 6.6

Source: Labor Department