State Unemployment Rate Declines to 5.7%
Moving in tandem with the national economy, California’s job market expanded at a healthy pace last month as brisk hiring by retailers and the sprawling services sector more than offset mounting cutbacks in manufacturing.
The government said Friday that payrolls in the state increased by 29,700 in November, as California employers produced just about its share of the 267,000 jobs added nationwide last month. The state’s unemployment rate fell to 5.7% from 5.9% in October, matching an eight-year low also posted in July.
The Employment Development Department said more than 13.7 million Californians held payroll jobs last month, an increase of 2.7% from November 1997. That is a slower growth rate than early this year, but still solid. Among regions, job growth once again was led by Riverside and San Bernardino counties, where construction is booming. Orange and Ventura counties were not far behind.
Unemployment in Los Angeles County also dropped last month, to 6.6% from 6.8% in October. Payrolls in the county were up by a more modest 2.3% from a year ago, comparable to the national rate. While low by Southern California standards, that was more than double the growth rate for Santa Clara County, home to Silicon Valley, which is now feeling the full brunt of the 1 1/2-year-old Asian crisis.
Amid falling exports to Asia and weakening business investment at home, employment at electronics and other goods makers in California fell by 6,200 in November, by far the largest monthly decline this year. Nationwide, factory payrolls dropped by 47,000 last month.
Given California’s extensive exposure to Asia and recent layoff announcements by firms such as Boeing Co., manufacturing payrolls throughout the state are expected to fall further.
“It may be another six to nine months before we feel the worst of this is over,” said Richard O’Brien, economist for Palo Alto-based computer maker Hewlett-Packard Co.
Yet the softer side of high technology--software and computer services--is continuing to expand in California and nationwide, driven by work with the Internet, the year 2000 computer problem and programming for the euro currency conversion in Europe. With major firms such as El Segundo-based Computer Sciences Corp., California employs about one-fifth of the nation’s computer services workers.
Finance Department economist Ted Gibson estimated that California added 2,500 computer services jobs last month, enough to offset the decline in computer and electronics manufacturing. Electronics manufacturing jobs pay on average $47,000 a year, Gibson said, and computer services’ salaries are typically about $20,000 more than that.
Including computer services, business services contributed about half of the nearly 30,000 nonfarm jobs added last month. Other services that hired a large batch of workers included social services, private education firms, and biotechnology and other engineering and management services.
The other big job producer last month was retailing, which added a seasonally adjusted 9,400 workers in anticipation of a robust holiday shopping season.
Statewide, construction employment continued to grow at a good clip, adding 3,400 jobs. Economists believe construction work will provide California a big cushion as it feels further shocks from the Asian crisis and the expected slowdown in the national economy. Government employment also rose by 3,600 last month, as local schools continued to hire to meet lower classroom-size standards.
The finance, insurance and real estate sector statewide lost 700 jobs, as banks and mortgage bankers cut back. Farm employment, meanwhile, rose by 4,300 but remained significantly below last year’s level.
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Fewer Jobless
Brisk hiring sent California’s unemployment rate lower for the second month. Unemployment rate:
November: 5.7%*
* Preliminary
* Source: California Employment Development Department
