State Unemployment Dips in Hiring Surge

Reflecting the increased momentum in California’s economic expansion, employers in the state added a hefty 41,300 jobs in March, trimming the unemployment rate to 6.5% from 6.6% in February, officials reported Friday.

The report, by the state Employment Development Department, said California has now created more than 1 million jobs since the depth of the recession in April 1993.

Boosted by a surprising 3% gain in the number of manufacturing jobs, Orange County continued to shine as one of the state’s hottest job markets last month.

The county’s unemployment rate shrank to 3.2% from a revised 3.5% in February. It was the fourth lowest jobless rate among California counties, and a full percentage point below the rate in March 1996.

“The fact that we’re generating more jobs than people entering the labor force is indicative of a very strong economy,” said Esmael Adibi, director of Chapman University’s Anderson Center for Economic Research.

With job growth running at a 2.5% annual pace, Orange County’s unemployment rate will probably hover around the 3% to 3.5% rate for the remainder of the year, Adibi said. Unlike the state unemployment rate, the Orange County figure is not adjusted to account for seasonal variations.

Economists were particularly heartened by the rebound in Orange County’s manufacturing industry. While the increase wasn’t large, it was taken as a clear sign that the bleeding has finally stopped in the goods-making sector.

The largest increase--16.9%--was among aircraft and airplane parts makers, which are benefiting from strong demand in both the defense sector and the commercial aircraft industry.

The export-sensitive wholesale trade sector provided another bright spot for the county, as employment rose 4.4% from year-earlier levels.

And, like the rest of the state, the county also continued to benefit from the hiring spree by public schools to fill the mandate for smaller primary classes.

In one of the few negative signs, employment in the finance, insurance and real estate industries in the county slipped another 0.3% in March, as financial institutions continued their consolidation. That trend “will be with us for a couple of more years,” said Adibi.

Ted Gibson, chief economist at the state Department of Finance, raised another concern--the supply of new labor isn’t keeping pace with demand in Orange County. That could constrain local business expansion, he said. “Growth is going to have to come from importing workers” from outside the county, he said.

Gibson was also puzzled by slow employment growth in retailing, which rose by just 0.7% for the year, and in the amusement business, which lagged the state with a 2.4% increase. Also, the number of jobs at county hotels was flat--although that could change when the summer tourist swarms descend.

Job gains were spread throughout the state in March. Los Angeles County continued to see its unemployment rate dip, to 7.2% from 7.3%, and neighboring counties in the Southland enjoyed an even bigger drop in joblessness.

Statewide, business services, a group that includes software firms and temporary-help agencies, led the hiring spurt in March--the second straight month in which nonfarm payrolls expanded by more than 40,000, substantially more than the 30,000 monthly average last year.

Construction, retail trade and other strong export industries--electronics manufacturing in Northern California and film production in the southern half--also posted nice gains in March.

Even aerospace manufacturing, thanks to the commercial aircraft buildup, proceeded on its slow climb since hitting bottom in April 1996, adding 300 jobs last month.

“We’re seeing some good things happening to the state,” Gibson said.

California’s jobless rate in March remains noticeably higher than the U.S. figure of 5.2%. Analysts, however, expect that gap, once almost 3 percentage points, to narrow quite a bit more this year.

Statewide, California is currently adding jobs at a 3% annual rate, compared with 2.2% for the U.S. Although Los Angeles County still lags the state, its job growth rate is about the same as the nation’s, and analysts point out that the Los Angeles labor market is more robust than other large U.S. cities.

“For Los Angeles County to do as well as the nation is quite substantial,” said Stephen Levy, director of the Center for the Continuing Study of the California Economy in Palo Alto. That’s especially so, he said, given that the Southland has seen no major turnaround in housing market or the aerospace industry.

Construction employment in Los Angeles County, for example, was unchanged in March from a year earlier. But for the state overall, construction payrolls were up 11% over the last year.

Still, the Southland continues to ride the cresting entertainment industry, which includes film production and multimedia. Motion pictures added 2,300 jobs last month in Los Angeles County, which now has 145,600 people working in that industry, an 11% increase from a year earlier.

In a separate report Friday, the California Film Commission said film starts jumped 30% last year in California to 570. And while most of the film projects are in Los Angeles County, the commission said, many are moving to neighboring counties.

Sheri Davis, director of the Inland Empire Film Commission, said that three years ago, film companies “flew over” her area on the way to other locations. But, she said, “now the industry lands in our back lot.”

Last month, the unemployment rate in the Riverside-San Bernardino area fell to 5.5%, from 5.7% in February, as that region saw job growth in most industries, particularly services and retail trade.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Doing the Job

Orange County’s March unemployment rate was the state’s third lowest at 3.2%, ranking just behind Northern California’s high-tech employment hot spots.

*--*

Rank County Pct. 1. Marin 2.7 San Mateo 2.7 2. Santa Clara 3.1 3. Orange 3.2 8. San Diego 4.3 18. San Bernardino 6.1 21. Riverside 6.8 25. Los Angeles 7.1 California 6.6 U.S. 5.5

*--*

Orange County Statistics

Monthly Trend

1997

March: 3.2

March Trend

1993 6.6%

1994 5.9

1995 4.8

1996 4.2

1997 3.2

Source: State Employment Development Department; Researched by JANICE L. JONES / Los Angeles Times