O.C. Unemployment Rate Down to 4.1%, a 4-Year Low

SANTA ANA — Spurred by holiday retail hiring, Orange County’s December unemployment rate fell to 4.1%, its lowest level in four years, to set the stage for what economists say should be moderate job growth in 1995.

The report issued Friday by the state Employment Development Department does not show the effects of the county government’s Dec. 6 bankruptcy filing because the resulting layoffs of 400 county workers were not made until January.

Economists say they do not expect that financial crisis to derail job growth for 1995. “It’s still a pretty good economy,” said Esmael Adibi, an economist at Chapman University in Orange.

The most important news in the December report, Adibi said, is that it shows the first growth in the county’s manufacturing employment since 1989. “Those are permanent jobs,” he said, “and that is heartening news.”

The December report also indicates that Orange County is be far better off than its neighbors. In Los Angeles County, for example, the December unemployment rate was 8.1%. The statewide average was 7.0%.

Overall, the EDD reported that Orange County ended the year with 1,130,700 workers on civilian and local government payrolls, up 0.7% from 1,122,800 in December, 1993. The average number of jobs for all of 1994, however, was down slightly from 1993’s average.

That decrease, 1,500 jobs, may be revised later, economists said, because the state typically overestimates unemployment in its preliminary reports. Adibi said that when final data is released in March, “I expect we’ll see that Orange County employers actually added 5,000 to 10,000 new jobs in 1994.”

For 1995, Chapman’s Center for Economic Research had predicted that Orange County employers would create 21,000 jobs. Now, because of the chilling effect of the bankruptcy filing, that forecast has been reduced to 17,000 new jobs, Adibi said.

For Los Angeles County, Chapman is projecting 17,600 new jobs this year, contrasted with a net loss of 35,700 jobs in preliminary reports for 1994.

Most of the hiring in both counties will be spurred by revitalized home construction, increased production of civilian electronic equipment and continued hiring in the service sector, which includes foreign trade, health and medicine, and business services such as banking, according to Chapman economists.

“Services have been growing for some time now, but the increase in goods-producing employment is new and healthy,” said Anil Puri, chairman of the economics department at Cal State Fullerton.

“The December numbers for Orange County look good,” he said. “And it is the second consecutive month that we’ve seen a healthy improvement.”

The biggest gain in December was in retail trade, which added 4,800 jobs to cope with several store openings and merchants’ expectations--largely realized--of a good holiday shopping season.

Wholesale trade, including the warehousing and shipping businesses that handle increased flows of merchandise for the holiday season, added 600 jobs during the month.

Those gains were offset in part by the loss of 1,400 construction jobs, largely because of a building slowdown as interest rates rose. This month’s heavy rains are likely to bring another large decline in construction employment.

For all of 1994, EDD labor market analyst Eleanor Jordan reported, Orange County employers added 6,100 service jobs; 1,200 government jobs; 1,500 transportation jobs, including positions in trucking, air freight and passenger transportation; and 200 construction jobs.

That was countered, however, by the net loss of 3,500 manufacturing jobs, mostly in defense and aerospace; 3,400 jobs in finance, insurance and real estate; 1,800 in wholesale trade; and 1,600 in retail.

If the March revision of 1994’s employment data shows what Adibi and others expect--a gain of 5,000 or more jobs--most of the increase will be in the services sector.

Since 1990, the year the county’s economic boom ended and a national recession began, total employment in the county has dropped by about 58,000 jobs. Manufacturing accounted for 302,000 jobs in 1990 but had shrunk to just 205,500 in 1994.

The manufacturing sector in Orange County, long dependent of government defense contracts, “just isn’t growing,” Adibi said, “and isn’t expected to.”

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Jobless Rate Dips

Holiday hiring in December lowered Orange County’s unemployment rate to 4.1%, the lowest level in four years. The 13-month trend: (graphic)

December: 4.1%

December’s rates

Unemployment in the county was well below both the nationwide and California figures:

U.S.: 5.1%

California: 7.0%

Orange County: 4.1%

Source: California Employment Development Department