State Job Rate Hits Best Level Since ’89 as U.S. Holds Firm
In one of the brightest economic reports for California in years, government officials said Friday that the state gained 19,000 jobs last month while its unemployment rate fell to 7.7%, from 8.8% in November.
For all of 1995, California’s job total climbed 178,200 to nearly 12.4 million, easily the state’s best year since 1989. To many analysts, the numbers suggested that California’s economic recovery is accelerating despite lackluster business growth nationally.
The December job increases were widespread, led by services, retailing, manufacturing and wholesale trade. Even the long-suffering aerospace manufacturing industry, which pulled the state into recession 5 1/2 years ago, showed a gain of 100 jobs last month, its first increase in years.
The U.S. jobless rate held firm for the second consecutive month at 5.6% as employers added 151,000 workers to their payrolls, a moderate rise. Analysts noted that the increase was inflated by about 40,000 because striking Boeing aircraft workers returned to the assembly lines.
The California statistics, on the other hand, lifted the hopes of economists and state officials. “This is a very upbeat report” for California, said David Hensley, a regional economist with Salomon Bros. in New York and a former director of the UCLA Business Forecasting Project.
“Most sectors of the economy are stable or growing, and all of the major regions are posting growth,” he added.
Moreover, Hensley said, several factors bode well for the state’s recovery later this year, including the possibility of stable or declining interest rates, a pickup in home building and improvement in the economies of two key trading partners, Japan and Mexico.
“California is at a very sweet spot--its best growth could be out in front, and you can’t say that for the rest of the nation,” Hensley said. California, he said, “still has the potential to have an all-out boom year.”
The December report included major upward revisions for October and November that, all told, showed that the state added an average of 20,800 jobs a month in the final quarter of 1995, far higher than earlier estimates.
Those jobs gains were reminiscent of the kind of employment increases California enjoyed before it was hammered by the severe recession that began in mid-1990. During 1989, for example, the state gained 23,633 jobs a month.
Analysts cautioned that the state’s economic figures are volatile because of the relatively small sampling on which they are based and, consequently, the latest numbers could be overstating the recent improvement. When the November employment statistics came out, for instance, economists were not certain whether that month’s sudden percentage-point jump in the unemployment rate was a statistical glitch or a warning sign.
Friday’s report, however, calmed fears by bringing the state’s jobless rate back into the range where it spent most of the year. For all of 1995, in fact, California’s jobless rate averaged 7.8%, compared to 8.6% in 1994.
California’s recovery “is becoming more broad-based,” said Adrian Sanchez, a regional economist with First Interstate Bank in Los Angeles. “Before it was services, and that was it.”
Even the struggling category of finance, insurance and real estate was up 1,100 last month. At firms such as the Danzi Capital Group, an investment firm in Newport Beach, managers have started hiring again.
“The [stock] market keeps hitting record highs, and you need brokers and investment bankers,” said Mike Danzi, the firm’s president.
In Los Angeles County, the jobless rate--which, unlike the state and national rates, is not adjusted for seasonal trends--settled back down to 7.6% in December after spiking up to 9% in November. For all of 1995, Los Angeles’ jobless rate averaged 7.9%.
Among the 11 big states whose jobless rates were reported Friday, only California, Florida and Ohio posted declining rates of unemployment. All the same, California continued to log the highest jobless rate in the group.
Next came New Jersey, whose unemployment jumped to 7.3% in December from 6.1% the month before. The lowest jobless rates were posted by Ohio and North Carolina, both at 5.1%.
Nationally, the employment report reinforced the widespread view that the U.S. economy is growing slowly. “This is not a weak report, but certainly not a strong one either,” said Lyle Gramley, chief economist for the Mortgage Bankers Assn.
Silverstein reported from Los Angeles and Rosenblatt reported from Washington. Times staff writer Don Lee in Orange County also contributed to this story.
* WORKERS WANTED
Various industries in Southern California are hiring. D1
