Jobless Rate in O.C. Hits 2.8%, a 7-Year Low

Orange County’s unemployment rate fell to a stunning 2.8% last month, the lowest level in more than seven years, providing further evidence that the economy is continuing to forge ahead.

Employers in the county added 5,000 jobs from October to November, and total employment has risen by 31,100, or 2.6%, since November 1996.

Though the county’s jobless rate is not seasonally adjusted, and a decline was expected because of the usual retail hiring spurt for the holidays, the drop from October’s 3.3% rate was even larger than economists expected.

“There’s no question it’s big news,” said Esmael Adibi, director of Chapman University’s Anderson Center for Economic Research. “This is a benchmark for the 1990s.”

California’s jobless rate also fell dramatically in November, to a seven-year low of 5.8%, seasonally adjusted, as 70,000 more people were reported working, the government said Friday.

The drop in the state unemployment figure, from 6.4% in October, was the biggest single monthly decline in 15 years. And it reflected the continued, steady gains in California’s employment, which last month surpassed 15 million for the first time.

Analysts seemed particularly pleased by the latest Employment Development Department report because it came amid increasing concerns about Asia’s economic troubles and the shaky stock market. November’s job data showed no signs of weakening as a result of the Asian situation, but many economists are expecting the problems abroad to slow the growth of jobs in California next year.

In Orange County, last month’s rate was the lowest since March 1990, when it was 2.7%. Economists now believe the county unemployment rate could drop even further this month, to about 2.6%.

Though Orange County’s extremely low unemployment is significant, it is not unprecedented, said Anil Puri, director of Cal State Fullerton’s Institute for Economic and Environmental Studies. During much of the late 1980s, the county’s jobless rate was between 2% and 3%, he noted.

But Puri said the county’s economy is healthier today than it was a decade ago because the real estate market is not soaring out of control. “There’s only one possible cloud on the horizon, and that’s the Southeast Asian crisis,” he said.

Adibi also expressed caution about turmoil in Asia, and said he doesn’t expect the county’s unemployment rate to remain this low for long. County exports could be hurt by Asia’s economic problems, he said, and that could staunch the recovery in the manufacturing sector, which has boosted factory payrolls in the county by 6,800 in the past year.

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The monthly jobs survey was conducted relatively early in November, before South Korea’s economic woes became widely apparent.

“It’s too premature, but there’s no question it’s going to slow us down in our manufacturing job formation,” Adibi said.

Several analysts say the weakness in the Asian economy will crimp California’s employment growth next year by 25,000 to 65,000 jobs, because the state relies much more on Asia for exports and tourism than the nation as a whole.

“I would expect to see an impact in February or March,” said Ted Gibson, chief economist at the state Department of Finance. But after reviewing November’s report, he said: “At the moment, I’m fairly encouraged.”

The last time California’s unemployment rate was this low was the summer of 1990, when the state was coming to the end of a long economic boom.

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As in recent months, the latest data suggested that Southern California is catching up with its faster-growing northern half, with Orange County and the Inland Empire showing particular strength. Los Angeles County, although still lagging, also is picking up; its unemployment rate dipped to 6.3% last month, down from a revised 6.5% in October and 8% in November 1996.

Once again, motion pictures provided the fuel for Los Angeles County, adding 4,400 jobs between October and November. The industry now employs more than 151,000 people in the county, and analysts say that may be an undercount of more than 12,000.

Statewide, the government’s survey of employers showed that nonfarm payroll employment surged 30,000 in November, as a broad spectrum of industries posted gains. (Total civilian employment, which grew 70,000 last month, is based on a household survey and includes self-employed, farm workers and other paid family help.)

According to the seasonally adjusted payroll data, retailers led the state growth, adding 11,000 jobs. Analysts said that was higher than usual for November, but they attributed it to the smaller hiring that was recorded in October.

Services throughout the state boosted payrolls by 6,500 jobs in November. Business services, which includes software companies and temporary help agencies, and agricultural services have been the two fastest-growing services in the state; both have been adding jobs recently at an annual rate of almost 8%.

Last month, manufacturing employment rose an impressive 5,400 jobs, with electronics contributing nearly a fifth of that growth. Aerospace employment picked up 200 jobs, increasing its gain over a year ago to a total of 4,200.

Employment at factories that make semiconductor equipment grew 400 last month; analysts are watching this sector closely, believing that it will be one of the first to feel the Asian crisis because those machines are made almost exclusively in the Silicon Valley.

Agricultural employment is also expected to take a hit from Asia’s weak economy and currencies. Some exporters such as Sunkist already are feeling the pinch. But last month, farm employment rose 1,400 to a total of 401,500.

Even the long sluggish finance and insurance industry grew 3,100 jobs last month, most of that coming from banks and other depository institutions. Construction was the only sector that had no growth last month; its employment was flat, largely because of the unusually wet weather in the state.

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The sharp one-month drop in the state’s jobless rate--which also fell that much in June 1983--did not completely surprise analysts. Gibson, the Finance Department economist, said the unemployment rate had been stagnating in recent months despite continued healthy gains in employment. “The unemployment rate is finally catching up with reality,” he said.

The state’s jobless rate is far below the 9.7% peak for the decade, reached in 1993, but remains higher than the nation’s, which fell to a 24-year low of 4.6% last month. However, the gap is closing, and with California’s job growth outpacing the nation’s, more people are moving into the state than leaving. That, along with a reentry of idle workers who see more promise now, is expected to increase the state’s labor force in the coming months--and that could push up the unemployment rate a bit.

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The jobless rates for many areas of California dropped sharply last month. Riverside County’s rate plunged to 6.8%, from 8.1%; and it dropped to 5.4% in San Bernardino County, down from 6.3%. Ventura County’s unemployment figure was pegged at 6.6%, from 6.9%.

The unemployment rates for the nation, state and Los Angeles County are seasonally adjusted. The figures for other areas are not.

* WILD ON WALL STREET

Fears over Asia’s economic crisis sent U.S. stocks lower in a roller-coaster ride. D1

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Unemployment Fades

Orange County’s November jobless rate was the lowest recorded in more than seven years. Here’s the 13-month trend:

1997

Nov.: 2.8%

Source: California Employment Development Department