O.C.’s Jobless Rate Falls to 5.9% in August

Orange County’s jobless rate, reflecting a continuing revival of the local economy, fell to 5.9% in August from the July 6.6% level, according to preliminary state employment figures released Friday.

Last month’s jobless rate matches the national level and is well below the state’s 8.6% rate last month.

“There’s no question that the economy and the employment picture are improving,” said Anil Puri, chairman of Cal State Fullerton’s economics department. The August figures are “in line” with projections for slow but continued local economic growth, he said.

Overall, 78,900 county residents were without jobs last month while 1.26 million residents were working in Orange County and elsewhere.

August’s figure is a full percentage point lower than the county’s 6.9% rate a year earlier, but the state Employment Development Department said that comparisons between the two shouldn’t be made because federal calculations, from which jobless figures are derived, changed this year. Mainly, the U.S. Census Bureau now includes many more self-employed workers on its rolls.

With defense industry cutbacks especially, the number of self-employed workers will continue to grow and will help to further pull Orange County’s economy from the long recession, said Esmael Adibi, director of Chapman College’s Center for Economic Research.

One such self-employed worker, Roy Robbins, was laid off from his job as an engineer with Hughes Aircraft Co. 15 months ago and took advantage of a government retraining program for laid-off aerospace workers to start a mail-order company, Bad Moon Books, that sells rare books. Earlier this year, he and a partner opened the Book King rare and used bookstore in Costa Mesa.

“It’s like being a professional athlete, if you can do what you love doing,” Robbins said. Though he works about 60 hours a week, “it feels like the equivalent of 30 hours at Hughes,” he said.

Hughes this week said that it plans to close most of its Fullerton operation and take more than 6,000 jobs from Orange County over the next 16 months, which likely will lead to, among other things, a new crop of self-employed workers.

Adibi pointed to a separate report issued Friday by the state employment department that shows that companies are hesitant to make new hires. Employers, fearing rising interest rates and unsure about how much health-care reform will eventually cost them, are instead sending additional work out to contractors, often self-employed people, he said.

The state agency said that Orange County employers cut 2,800 jobs from their payrolls in August from the previous month, mostly a result of teachers taking a break between summer school and the fall semester. The number of jobs here fell to an estimated 1,108,500 from 1,111,300 in July.

That survey, based on reports from employers, should show a gain in September, and more Orange County jobs should be created through the rest of the year, Puri said, “though it will still be moderate compared to a normal recovery.”

Adibi said the state numbers, especially the latest preliminary figures for August, will be revised later and will show that additional jobs are being created. The state agency, he said, tends to overestimate job losses during a recession and underestimate job creation during a recovery.

Even so, there’s no mistaking that jobs in technology and manufacturing continue to decline.

Layoffs at defense and aerospace firms over the last three years have caused a deep decline in high-tech work. High technology manufacturing jobs decreased by 4,100 during the previous 12 months, and the Hughes consolidation will add to that. Neither Adibi nor Puri, though, believe that the Hughes cutbacks will have a significant impact on the county’s economic recovery.

Manufacturing in general lost 3,000 jobs over the same period. A gain of 2,300 jobs, mainly in the seasonal activity of food processing, was offset by a loss of 5,300 jobs among makers of durable goods. Air-quality restrictions and other business roadblocks have long been pushing such manufacturers out of state.

Mergers and failures in the banking and thrift industries led the financial sector to lose 4,100 positions over the previous 12 months.

The services sector, as usual, showed gains as 4,700 jobs were created over the last 12 months. The biggest boost, 1,500 positions, came in business services, transportation and public utilities.

Times staff writer Ross Kerber contributed to this report.

Unemployment Drops

Orange County’s jobless rate dipped to 5.9% in August, down from a 6.6% level in July and well below the August statewide level of 8.6%. Here’s the 13-month trend:

August 1994: 5.9%

Source: Employment Development Dept.; Researched by JANICE L. JONES / Los Angeles Times