California Adds 30,500 Jobs in Sept.

Defying a surprise downturn in employment nationally last month, the rebounding California economy added an ample 30,500 jobs in September, government officials reported Friday.

The job gain helped nudge the state’s unemployment rate down to 7% from a revised 7.1% in August.

In Orange County, stronger-than-expected job growth helped to send the local unemployment rate to 4.1%, its lowest level since the beginning of the recession six years ago.

September marks the sixth consecutive month that California has hit or maintained its lowest unemployment rates in more than five years.

“The economy seems to be very much on track,” said Jay Kloepfer, a regional economist with the DRI/McGraw-Hill consulting firm.

For months, much of the state’s upturn has been led by “the things that California does well--high-tech manufacturing and high-tech services and the entertainment industry,” noted Ted Gibson, economist for the State Department of Finance.

While those areas continued to show strength, another important ingredient last month was growth in public education employment, particularly in Southern California. That largely reflected teacher hiring by school districts tapping new state funds to reduce class sizes for 1st-, 2nd- and 3rd-graders.

Los Angeles County, one of the state’s economic weak spots since the early 1990s, saw its jobless level fall to 7.5%. That was down from a revised 7.8% in August and the lowest mark since May 1995, when the rate was 7.4%.

Likewise, in Orange County, one of the state’s economic stars, the jobless rate fell from a revised 4.3% in August and equaled a mark set in December 1990. The previous low was 3.8% in August 1990.

The state’s figures are adjusted for seasonal trends, but Orange County’s are not, according to the state Employment Development Department.

“In the earlier stages of the recovery, it was true that Southern California was lagging the north, but that’s not the story anymore,” said David Hensley, regional economist with Salomon Bros.

In fact, Hensley said, long-struggling Los Angeles County and some other lagging areas in Southern California offer more potential for growth than Silicon Valley, where real estate and labor costs have been relatively high amid a technology-driven boom.

The latest state statistics still leave California with far higher joblessness than the nation.

The U.S. jobless rate, reported two weeks ago, edged up to 5.2% in September from 5.1% in August, as employers pared 40,000 jobs from their payrolls. It was the first job decline in eight months in a generally vigorous U.S. labor market.

But California’s growth this year has substantially outpaced the nation’s. “The U.S. has run into limits because there are so few able-bodied people still unemployed, and California hasn’t run into anything near that,” Hensley said.

The only downbeat note that Hensley sounded for California was his assessment that the state’s recovery is unlikely to speed up further. He said a broader expansion is being thwarted by the continuing slump in home building and the weakness of the economies of such key foreign trading partners as Japan and Mexico.

Orange County’s jobless rate fell significantly from the previous September’s 5.3% rate, “and that’s a positive statement about the rebounding economy,” said Esmael Adibi, director of Chapman University’s Center for Economic Research. A total of 55,000 local residents were out of work last month.

But Adibi warned that the rates aren’t seasonally adjusted and that observers must wait a few months to see how reliable the figure is.

Orange County’s job growth, which isn’t seasonally adjusted either, has surpassed the estimates that economists made last fall. The total payroll rose in September to 1.18 million, a 2.6% increase from the year-earlier number.

The most aggressive estimate for the county had been Chapman’s 2.3%, Adibi said, and the county already has passed that.

“I think this is a milestone,” he said. “This is the fastest job formation we’re experiencing since the recession of 1990.”

The county’s manufacturing sector, long in decline and rocked more by the loss of defense jobs, grew 1.4% in the past year. The sector began adding jobs in January, but the latest rate is the first that exceeds 1% since before the recession, Adibi said.

“This confirms what we’re hearing from manufacturing purchasing managers that the economy is rebounding and production and hiring are increasing,” he said.

A 4.4% growth in the wholesale sector, he said, indicates that Orange County’s foreign trade activity is growing solidly. “This confirms again our belief that international trade is going to be the engine of growth for the county in the years to come,” Adibi said.

Altogether, the county added 9,500 jobs from August to September and 30,100 from September to September, figures that aren’t adjusted for seasonal trends.

Over the last 12 months, California has gained an average of 24,025 jobs a month, slightly ahead of the pace of last year and just behind the 24,175 monthly average of vibrant 1989, the year before the recession struck.

In September, most of the state’s new jobs came in the broad category of services, which posted an employment gain of 13,000. The biggest decline came in manufacturing, which was off 1,200, but that was largely attributed to temporary weather-related declines in food processing.

In fact, the aerospace industry--whose severe downturn dragged the state into its recession of the early 1990s--and the rest of the durable manufacturing sector were up slightly.

In Southern California, the jobless rates dropped in every county but Ventura, where the seasonally unadjusted level held even at 8.2%.

Among the region’s other counties, the jobless rates--none of which was adjusted for seasonal trends--were: San Diego County, 5.3% in September, down from 5.5% in August; Riverside, 9%, down from 9.3%; and San Bernardino, 7.1%, down from 7.4%.

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Job News

Orange County unemployment fell to 4.1% last month-- the lowest rate since 1990.

September Trend

1990: 3.8

1996: 4.1

Monthly Trend

Sept. 1995: 5.3

Sept. 1996: 4.1

Source: California Employment Development Department