California Job Growth Slows Sharply in June
Signaling that California’s economy is cooling, job growth in the state slowed markedly in June as the Asian crisis continued to weaken manufacturing, motion pictures and some other sectors.
Government officials said Friday that nonfarm employers in the state added 30,000 to their payrolls last month, many of them in business services and construction. That was enough to push the unemployment rate down to 5.7% from a revised 5.9% in May.
Orange County’s unemployment rate edged up to 3% from 2.7% in May. Unlike the state figure, the county’s jobless rate is not seasonally adjusted and therefore reflects the usual summertime surge of student job seekers.
However, job growth in the county is slowing. Since hitting a torrid 5.3% annual rate in January, growth in the county’s payrolls has steadily subsided to 3.5% in June.
“We started in January with such a huge bang,” said Esmael Adibi, director of Chapman University’s Anderson Center for Economic Research. “We knew that would not be sustainable.”
Although economists still viewed the 30,000 new jobs in the state as a healthy amount, it was considerably lower than the 42,000 posted in May. More significant, while job figures can be volatile from month to month, a clear pattern emerges when the data are viewed over six months.
In January, the state’s total nonfarm job count was about 538,000 higher than a year earlier. But since then, the year-to-year growth figure has declined successively every month, to 398,000 in June.
Job growth in the second half of last year was unusually strong, and economists did not expect the state to maintain that sizzling pace this year. Bruce Smith, an economist at the state Department of Finance, accentuated the positive, saying jobs in construction and business services--which includes high-paying software programmers--are steaming along. Also, California continues to add jobs at a brisker pace than the nation.
But other economists expressed more concern.
“What it says to me is that we are moving from an aggressive period of growth to a more moderate one, where policymakers can no longer be sanguine that the economy can accelerate as it has been,” said John Husing, a longtime regional economist based in Riverside. “Definitely, there is a shifting of gears out there, and you have to be alert.”
Jack Kyser, chief economist at the Economic Development Corp. of Los Angeles County, echoed those concerns: “The second half of the year is going to be much slower growth,” he said.
The slowdown is statewide but more pronounced in Northern California, economists said, partly because Asia’s financial crisis is putting pressure on sales and employment in Silicon Valley.
The momentum has swung to Southern California, which is picking up more of the new jobs. But the rate of hiring is slowing as well.
In Los Angeles County, nonfarm employment in June was up 97,300 from June 1997, for a growth rate of 2.5%--the lowest rate this year.
The good news is that Los Angeles County’s jobless rate continued to drop, to 6.3% from a revised 6.4% in May. But that was largely due to a drop in the labor force.
In contrast to the nation, which is showing a decline in manufacturing jobs, Los Angeles County is relentlessly adding factory workers, especially in food processing and the apparel industry.
However, growth in the county’s motion pictures industry has clearly abated. From January to June, the industry’s payrolls averaged 126,500--down from 127,200 in the first half of 1997.
“There’s this very subtle retrenchment,” Kyser said, noting that Walt Disney, Paramount Pictures and others are releasing fewer feature films. Television and commercial production through June is also down, industry figures show.
Times staff writer Patrice Apodaca in Orange County also contributed to this report.
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Cooling Off
June unemployment increased slightly in Orange County and job growth continued to slow down. Unemployment rate and job-growth percent change compared to 1997:
Unemployment Rate
1998: June 3.0%
Job Growth
1998: June 3.5%
Source: Employment Development Department; Researched by JANICE JONES DODDS/Los Angeles Times
