O.C. Jobless Rate Hits Record Low 2.3% in November

After months of declining unemployment, Orange County’s jobless rate fell in November to the lowest point on record, a minuscule 2.3%, officials reported Friday.

The drop, from a revised 2.6% in October, was caused partly by some seasonal factors such as increased hiring by retailers. But it also reflected the county’s remarkably robust economic growth over the last year in the face of an ever-shrinking labor pool.

“Think of that. A civilian work force of 1.5 million and 1.45 million are employed. Wow,” said Michael Bernick, director of California’s Employment Development Department, which Friday released the last jobs report of the year for Orange County and other areas of the state.

Statewide, employers created a hefty 45,600 new jobs last month in a burst of hiring that nudged down California’s unemployment rate to a seasonally adjusted 4.8%, a 30-year-low.

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 job gains. Nonetheless, wage inflation remained subdued.

Orange County employers have been adding roughly 3,500 jobs a month this year, down from an average of 5,000 last year, but still in line with its share of the state’s overall labor force. That drop-off partly reflects the county’s tighter labor market.

Orange County’s previous unemployment low was in late 1989, when the rate dipped to 2.4% before gradually rising as the county and the state slipped into recession. Whether the latest November rate can be sustained or not, analysts clearly see a double-edged sword in the county’s labor market conditions.

On the one hand, more workers of all skill levels are getting jobs--and better-paying ones. But employers’ troubles in finding workers are likely to persist in the coming months.

Indeed, some employers in the county already have resorted to guerrilla tactics in the battle for workers.

“I had to rely on my recruiting skills. I had to steal some of these people,” said Charles Holling, manager at Bombay, a specialty furniture and gift retailer at South Coast Plaza, which bulked up in November for the holidays.

One of his recruits, Henry Rodriguez, was working at the Gap when Holling came calling with a $2-an-hour boost in pay. Rodriguez, 19, jumped at it. He plans to keep the job well past the holidays.

“It’s going to be more difficult and expensive to hire people,” said Anil Puri, economist at Cal State Fullerton. He said a jobless rate of 2.3% essentially means everyone who wants work has it, with those unemployed largely representing people who are between jobs.

Among industries, Anaheim’s hotels appear to be having a fitful time trying to bulk up as Disneyland expands. “We’ve had a lot of requests from the hotel-motel industry,” said Marco Lucero, an analyst at Anaheim’s Private Industry Council, a government-funded training agency.

Over the past year, Lucero said his office has seen a steady level of job orders but a 25% decline in the number of clients. “It means individuals are having a good time finding jobs on their own,” he said.

As with Orange County, jobless rates throughout the Bay Area now are running at or near historic lows. Unemployment in the Riverside-San Bernardino area also fell last month to a record low, 4.5%, seasonally unadjusted.

“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 industry 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.

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.

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 and in anticipation of very brisk holiday sales.

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.

Statewide, 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--now only about $3 an hour less than manufacturing workers.

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Times staff writer Leslie Earnest contributed to this report.

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Unemployment Trend

Jan. 1999: 3.0%

July 1999: 3.1%

Nov. 1999: 2.3%

Source: Employment Development Dept.

Low All Around

November unemployment rates around Orange County.

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Aliso Viejo 1.5% Anaheim 2.7% Brea 1.6% Buena Park 2.8% Costa Mesa 2.0% Cypress 2.2% Dana Point 1.8% Fountain Valley 1.9% Fullerton 2.2% Garden Grove 3.0% Huntington Beach 1.7% Irvine 1.6% Laguna Beach 0.9% Laguna Hills 1.3% Laguna Niguel 1.4% Lake Forest 1.7% La Habra 2.7% La Palma 1.2% Los Alamitos 2.1% Mission Viejo 1.4% Newport Beach 1.4% Orange 2.2% Placentia 2.1% Rancho Santa Margarita 0.9% San Clemente 1.8% San Juan Capistrano 1.8% Santa Ana 4.2% Seal Beach 1.4% Stanton 4.1% Tustin 2.4% Villa Park 1.4% Westminster 2.8% Yorba Linda 1.3%

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Source: Employment Development Dept.