Unemployment in State Drops to Historic Lows

Employers in California created a hefty 45,600 jobs last month in a burst of hiring that pushed down unemployment rates to historic lows or close to those levels in many urban centers of the state.

California accounted for 20% of the jobs produced nationwide last month, nearly double the state’s share of the nation’s work force. The hiring, powered by strong performances from a broad spectrum of industries, was also well above the yearlong average of 30,000 monthly jobs gains.

“We’re going to go into the new year with strong momentum,” said Michael Bernick, director of the Employment Development Department, which on Friday released the state’s last jobs report of the year.

November’s job additions pushed California’s total nonfarm payrolls above 14.1 million--the 43rd consecutive month for a new record high, the government said. Electronics, apparel, food processing and business services all contributed to the strong hiring trend. Nonetheless, wage inflation remained subdued.

Statewide, the percentage of unemployed dropped a notch to 4.8% in November, a 30-year low. But jobless rates throughout the Bay Area and around Southern California are running well below that.

Unemployment in Orange County and the Riverside-San Bernardino area fell last month to record lows. “This is a new experience for us,” said San Bernardino economist John Husing, who has been tracking joblessness there since 1964.

Unemployment in Los Angeles County also declined in November, but its seasonally adjusted rate of 5.7% in November still left it higher than the near 5% level of the late 1980s.

Job growth in Los Angeles County has eased somewhat in recent months because of declines in aerospace and related manufacturers, such as fabricated metal producers. But motion picture employment surged last month, as did retail. And clearly, the benefits of the economic growth are spreading to more groups in the city.

“Our job developers are all placing more and more people,” said Val Bush, director of the Maxine Waters Employment Preparation Center in Watts, which trains and places workers.

Statewide, November’s jobless figure dropped from a revised 4.9% in October--the rate also in September when unemployment broke the 5% barrier for the first time since the Vietnam War.

State Jobless Rate Above U.S. Average

California’s statewide unemployment rate is still higher than the nation’s 4.1% in November. But the gap has continued to narrow since peaking at 2.8 percentage points in mid-1994.

Last month, officials tallied 801,000 unemployed in California’s labor force--down by 163,000 from November of last year.

Unemployment rates for Latinos and African Americans in California have fallen to decade lows in the last year. And in another measure of spreading benefits, the number of part-time workers in California who would want to work full time but can’t has fallen by 10% in the last year, to 578,000.

By the same token, the tightening labor market in major urban centers has contributed to a bit of slowing in employment growth this year. Job growth in both Orange and San Diego counties, where unemployment rates are below 3%, has moderated in recent months, partly because of a lack of workers.

Anaheim’s hotels, for example, are trying to bulk up as Disneyland expands, but they are finding a thinned supply of willing workers.

“We’ve had a lot of requests from the hotel-motel industry,” said Marco Lucero, an analyst at Anaheim’s Private Industry Council. Over the last year, Lucero said, his office has seen a steady level of job orders but a 25% decline in the number of applicants. “It means individuals are having a good time finding jobs on their own.”

Nancy Sidhu, an economist at Bank of America, said that based on historical trends, California’s unemployment rate could very well decline further this month. “The good times continue to roll,” she said after studying the latest jobs report.

In November, retailers statewide boosted payrolls by almost 63,000. But after adjusting for seasonal factors, officials said the industry added a net 12,300 jobs last month. That was still more than double what retailers added in November 1998.

Hiring by retailers throughout this year had been sluggish, so the big spurt was a bit of catch-up in anticipation of a very brisk holiday sales season.

In addition to retail, almost every other industry created a hearty batch of jobs in November. The sole exception was finance and real estate, which shed 400 jobs over the month.

Construction employment rose by 6,500 in November, partly because of unseasonably warm weather. Over the last year, the industry has added 53,400 workers.

Factory payrolls increased by 2,200 last month. Aerospace manufacturers cut 500 jobs, but the recovering electronics sector added 300. Apparel manufacturing and food processing also posted good job gains.

Business services reported net job gains of 6,800 over the month. That grouping of firms includes advertising companies, computer services and temporary-help agencies.

Despite the tightening labor market, the latest monthly report showed no signs of broad wage inflation in California.

Average hourly earnings for construction workers in November were up just 1.1% from a year ago, and up 1.2% in manufacturing. Retail workers’ wages, however, increased by 3.1% in November, to $10.92--only about $3 an hour less than manufacturing workers. “That’s what they’re having to [pay] to grow that work force,” said Ted Gibson, economist at the Finance Department.

Gibson is expecting slower job growth ahead, a trend that other reports support.

Wells Fargo Bank, in its fourth-quarter survey of several hundred small businesses in California, found that fewer employers will be hiring going into the new year than at this time in 1998, even though they remain very optimistic about economic conditions.

“Overall, the California economy is solid,” said Bill Dunkelberg, the economist who conducts the Wells Fargo study. “For the balance of the year and into the millennium,” he said, “the economic path looks fairly straight, even if it might be slowing a bit.”