O.C. Economic Recovery Spurred by Growing Consumer Confidence : Optimism: With employment increasing at last and home sales surging, the outlook has brightened.

Orange County consumers are the most confident they’ve been in four years. Home sales have surged, even in the face of rising interest rates. And this week the county got perhaps the best news of all: After four years of decline, employment in Orange County is climbing again.

Workers and businesses are beginning to feel that they are on solid ground again, and analysts sense that Orange County’s recovery, though plodding up to now, is assured.

That is benefiting people such as Edith Dodd of Anaheim Hills. Dodd, 59, retired two years ago from Rockwell International, but last month the former engineer decided to re-enter the labor force to pay for live-in nursing care for her mother in Kentucky.

Dodd had success immediately, landing one of the 700 jobs offered by the new Super Kmart store in Anaheim Hills.

Other Orange County retailers, brimming with optimism for strong holiday sales, are adding jobs as well as boosting orders for goods, and that will help maintain the economy’s momentum. Retailers said they got off to quick start Friday, when shoppers flocked to stores for the start of the Christmas shopping season.

“People in general are feeling real good about the prospects for ‘95,” said Tony Cherbak, a retail industry analyst at accounting firm Deloitte & Touche, who spent Friday surveying retailers and shoppers in Orange County. “Retailers in Orange County are upbeat. . . . It’s going to be a great Christmas.”

Consumers’ optimism is reflected in their willingness to make major purchases too. D.J. and Julieann Martin last month bought their first home--a spacious four-bedroom house in Huntington Beach.

“It’s back to normal. Things are turning around,” said Julieann Martin, a customer service manager at the National Education Center in Irvine. Her employer had layoffs in the summer, but Martin says she now feels secure in her job. And her husband, a fleet and truck manager at a Chevrolet dealership, is on track to make 20% more this year. “I just think we’re moving forward.”

Considering that Orange County has lost almost 50,000 jobs since the recession in mid-1990, the area still has far to go before it is restored to the luster of the previous decade. Not until 1996, economists say, will the county return to pre-recession job levels.

And the pains of layoffs aren’t over. The shutdown of Hughes Aircraft’s complex in Fullerton next year will put as many as 1,000 workers on the streets and remove another 5,000 jobs from the county. There is also lingering weakness in the computer industry and banking and finance, where consolidations are continuing.

Those factors, plus the fact that the recovery hasn’t shared its benefits equally, has left many skeptics.

“I don’t see it,” plumber Joseph Gallegos said of the heralded economic upswing. Gallegos, 26, said he had to postpone his wedding because he has not had steady work. “For me, it’s been real slow,” he said this week, sitting in the plumbers union hall in Santa Ana, hoping to be called out on an assignment.

Gallegos’ union leader, Ted Reed, says the work overall for his membership remains slow. But Reed said he is hopeful about 1995: “People we know say there’s a lot of possibilities for jobs next year.”

The work of plumbers, carpenters and others in construction should pick up as the housing market continues its recovery--and there are clear signs of that happening.

Recent reports show home sales in Orange County are up 22% for the first 10 months of 1994 compared to the same period last year. And the momentum seems to be building, real estate executives and bankers say.

At Downey Savings & Loan in Newport Beach, President Stephen W. Prough said he has had back-to-back monthly records in funding loans. And 70% of those have been for home purchases, a very good sign, Prough said.

The county’s retail real estate climate has improved as well, with a surge in development of theaters, restaurants and bookstores. Work began recently on what will be one of America’s largest movie complexes, a 21-screen Edwards Theater in the Irvine Spectrum business park. And major retailers such as Wal-Mart stores are moving into new facilities in Orange County.

“We’re in the first year of a sustained recovery in real estate,” said Walter Hahn, an economic specialist at Kenneth Leventhal & Co., an accounting firm in Newport Beach. “This recovery is going to continue to build on itself until the next national recession.”

Hoddy and Kelly Fritz waited for a year before they plowed their savings last month into a $186,000 house in Aliso Viejo. “It’s a dream for us,” said Hoddy Fritz, who works at Union Bank in Irvine. Fritz, 28, believes the housing market is headed for growth. “We feel over the five-year period that it’s a pretty good investment,” he said of their three-bedroom house.

Confidence appears to be spreading among corporations as well. And as that happens, workers will see more full-time jobs added to the large numbers of part-time and temporary employees that companies have hired in recent months--a trend that is common in the early stages of a recovery.

“Employers still are not certain of the economy in the long run and are relying on temporary workers,” said Sue Foigleman, manager for Manpower Employment Services in Orange County. But in a positive sign, temporary-help firms say more businesses are converting temporary jobs into permanent ones.

Unemployment in Orange County, which plunged to 5.1% in October, now stands at its lowest level in three years. More significantly, state figures released this week showed that October marked the second consecutive month of year-to-year job increases--which had not been seen since the onset of the recession. Job gains were recorded in services, construction and non-durable manufacturing, particularly in apparel.

“The big news is that real employment is up,” said Robert Barnum, president of American Savings Bank in Irvine. Local workers “may not be getting high-paying aerospace jobs--they may be in retail--but they’re getting jobs.”

That sums up the sentiments of Greg Arlotta as well.

Arlotta, who lives in Laguna Niguel, was laid off a year ago when Topa Thrift and Loan closed its El Toro office. Arlotta had 10 years’ experience in banking, mainly making large fund acquisitions.

Arlotta recently found work at the Wine Exchange in Orange, where he does everything from tasting wine to hauling crates around. “I’m certainly not making what I was making,” he said. But “I like what I do. I was a wine nut. I used to buy wine here.”

From his view, Arlotta said, “I think the economy is slowly improving.”

Times staff writers James S. Granelli, Greg Johnson, John O’Dell and Debora Vrana contributed to this report.