O.C. Jobless Rate Lowest in 5 Years

Orange County’s jobless rate sank in April for the fourth straight month, hitting a five-year low of 4.1%, as tourism-related industries and construction companies posted solid gains.

The state’s report Friday also showed Orange County is on the cusp of having regained all of the 50,000-plus jobs lost during the recession.

“That would be quite an event,” said Cal State Fullerton economist Anil Puri, noting that the area’s nonfarm employment last month was just 1,000 jobs shy of the April peak in 1990.

The bright report for Orange County mirrored the improving jobs picture for all of California. The state’s unemployment figure, which unlike the county’s is seasonally adjusted, fell to its lowest level in more than five years, to 7.5% from 7.7% in March.

Most of the other Southern California counties also showed declines in unemployment, but Orange County continues to enjoy the lowest rate--a function, analysts say, largely of the region’s highly educated and entrepreneurial labor force.

Orange County’s jobless rate has been declining incrementally since it started out at 4.7% in January. And in April, the local economy got a big lift from the resurging tourism industry.

Amusement parks, theaters and other recreation centers in the county added 1,300 jobs between March and April. While some of those were seasonally related, annual data show employment in that sector has jumped 12%--or 3,600 jobs--since April 1995.

“A lot of these have to do with [increased] discretionary consumer spending,” said Puri, the economist. “That is a sign of improving confidence.”

Overall, nonfarm payrolls in Orange County grew in April at an annual rate of 2%, as it has in recent months. Though that is slightly below the statewide pace, Puri and other analysts expect the county’s recovery to pick up momentum in the summer, partly because of gains in tourism, construction and other services.

Construction in the county has lagged, but last month payrolls expanded by 800--an encouraging sign that the slowly recovering office and housing markets will spur further growth.

Business services, which include personnel supply firms and software companies, continued their long expansion, adding 400 jobs in April. And retail trade, which last year dropped 1,300 jobs between March and April, bolstered payrolls by 200 in the same period this year. Leading the way were restaurants, where employment has surged 2.6% in the last 12 months.

“When people go to amusement parks and eat out, that means there would be more job growth,” said Esmael Adibi, an economist at Chapman University.

Manufacturing was the only sector last month to show a noticeable drop, spilling 400 jobs. On a year-to-year basis, factory employment in April was down 1,000 from a year earlier.

But with the long slide in aerospace apparently over, analysts said overall manufacturing in the county should get a boost from expanding exports of products such as medical instruments, machinery and computers. “I think exports are now on our side,” Adibi said.

In Orange County and elsewhere in California, several vital industries are growing smartly, raising hopes that the state’s rebound will be long-lasting. Those industries include entertainment and various sectors of high-technology.

Foreign trade, despite rising U.S.-China trade tensions, figures to keep propelling the California economy. Tom Lieser, associate director of the UCLA Business Forecasting Project, said that if the United States succeeds with its threatened sanctions in curbing Chinese piracy of intellectual property, California would be a big winner.

He said most of the goods China is accused of pirating are important California products: software, recorded music and movies. “Nobody wants a trade war, but if it [the threat of trade sanctions] works, there are billions of dollars at stake,” Lieser said.

In the near term, California also should be helped along by the generally strong national economy and the improvement by two of the state’s main trading partners, Japan and Mexico, said David Hensley, a regional economist with Salomon Bros. in New York.

For California, he said, “steady growth is almost guaranteed.”

Times staff writer Stu Silverstein contributed to the report.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Unemployment Drops

Orange County’s April unemployment rate is down a full percentage point from a year ago. Monthly unemployment trend:

1995

April: 5.1%

May: 5.1%

June: 5.4%

July: 5.7%

Aug.: 5.4%

Sept.: 5.3%

Oct.: 5.1%

Nov.: 4.8%

Dec.: 4.3%

1996

Jan.: 4.7%

Feb.: 4.6%

March: 4.3%

April: 4.1%

****

Orange County’s nonagricultural labor market has nearly reached pre-recession levels. Last month’s nonagricultural employment was only 1,000 jobs short of the April peak in 1990, before the recession. The comparison:

*--*

April 1990 April 1996 Services 309,600 359,900 Manufacturing 243,400 204,000 Retail trade 215,800 205,500 Government 128,900 132,200 Wholesale trade 80,400 87,900 Construction 57,200 49,300 Finance 37,300 32,600 Real estate 29,700 24,500 Insurance 29,100 27,700 Transportation 19,800 25,300 Communications/utilities 16,400 17,900 Mining 1,200 1,000 Total 1,168,800 1,167,800

*--*

Source: State Employment Development Department

Researched by JANICE L. JONES / Los Angeles Times