ORANGE COUNTY IN BANKRUPTCY : O.C. Jobless Rate Moves Up to 5.4%

Orange County’s jobless rate jumped to 5.4% in January from a revised 4.2% in December, reflecting the layoff of seasonal holiday workers and a slowdown in construction and other sectors because of the heavy rains.

While the month-to-month change appeared grim, the report released Friday by the state Employment Development Department also showed that Orange County employers had 20,600 more people on their payrolls in January than a year earlier. And analysts clung to earlier forecasts that the local economy will expand moderately this year.

“The basic strength of the economy hasn’t changed,” said Anil Puri, chairman of the economics department at Cal State Fullerton. “During the spring and summer and later on, it will depend on how severe the impact is from the county bankruptcy.”

Indeed, the latest jobs report does not reflect the effects of Orange County’s financial difficulties. The figures were compiled before the layoff of county workers began, said Eleanor Jordan, the state’s labor market analyst in Santa Ana.

Economists also expressed some concern because the job losses from December to January were bigger than expected and cut across all industries, even those usually not affected by seasonal factors.

Analysts said the report means that Orange County’s economy remains fragile, and a major layoff of county workers would be a serious blow.

What the county does in response to the bankruptcy, Puri said, “is going to be very critical. It is becoming clearer that there will be county layoffs, and some of the private sector will be adversely affected.”

Economists already expect the county’s financial difficulties to bear negatively on the February jobs report, set to be issued on March 24.

The release of the January figures was delayed because of the state’s so-called “bench marking”--an annual exercise in which officials use payroll tax records to correct past job market estimates.

The bench marking raised Orange County’s non-farm payroll at year’s end by 14,200 jobs from the preliminary figure reported previously.

The county’s January jobless rate, despite the one-month surge, was still much lower than the 7.2% figure for January, 1994. And the county’s rate was lower than that in all but two of California’s 58 counties.

As reported earlier, the January unemployment rate for Los Angeles County stood at 8.9% and for California, 8.7%.

Overall, Orange County lost 22,100 non-farm jobs in January from the previous month. Of those, 8,200 were in the retail trade, which is 1,000 more than were cut from that sector in January, 1994.

The torrential rains early this year pelted the construction industry, where employment plummeted by 3,800 jobs in January. That compared with a drop of just 600 jobs for the same month a year earlier.

A separate report by the state showed that construction workers in January put in an average of 31.5 hours of work a week, compared to 37.5 hours in December and 37 hours in January, 1994.

The services sector, which includes finance, insurance and real estate, also reduced payrolls more than usual in January, cutting 6,500 jobs.

“The services sector in particular is of concern,” Puri said, noting that it has been the core of the local economy’s rebound from the lingering recession of the early 1990s.

Government jobs declined by a total 600. The county government’s payroll dropped by 100 in January to a total of 17,200.

Manufacturing, which had held steady in recent months, lost 800 jobs in January, and more are expected to be cut as companies, such as Hughes Aircraft Co. in Fullerton, continue to lay off some workers and transfer others. In January, the average hourly wage of a manufacturing worker in Orange County was $12.55--down from $12.62 a year earlier.

On a year-to-year basis, the county added a total of 20,600 jobs, although 14,900 of those were in the services and retail sectors, where the hours are typically fewer and the pay lower than most other segments of the local economy.

Still, economist Esmael Adibi at Chapman University in Orange said the job growth indicates that “we are on road for economic expansion.” As for the unemployment rate, he said, “5.4% is very respectable.”

Chapman’s Center for Economic Research had initially forecast that Orange County employers would create 21,000 jobs during 1995. That projection has since been reduced to 17,000 because of the county’s bankruptcy.

* JOBS ELSEWHERE

Rates reflect improvements in California and L.A. County. D1