State’s Jobless Rate Remains at 9-Year Low
California’s economy kept up its hearty growth in June, creating an ample 28,400 jobs and holding unemployment to a nine-year low of 5.3% for the second consecutive month.
Figures released Friday by the California Employment Development Department showed expansion across a broad spectrum of the economy, including seven of the state’s nine employment categories.
“The economy is doing very well overall,” said Ted Gibson, chief economist for the state Department of Finance.
Still, analysts pointed out that a few crucial industries are sputtering or showing signs of softness. For example, Gibson noted that the aerospace and electronics industries together lost about 2,500 jobs in June. He blamed that on continued weakness in Asian economies and the strength of the U.S. dollar, which makes it more costly for foreign customers to buy American products.
In addition, analysts offered mixed views on the health of the motion picture industry, a key engine of the Los Angeles-area economy.
Statewide employment in motion pictures--which includes film and television production along with movie theater jobs--declined by 4,900 from May to June. That raised some concerns that cutbacks by Hollywood studios, and so-called runaway production to locations in Canada and elsewhere, could be taking a toll on employment in Southern California.
At the same time, June’s motion pictures job total remained 3,300 higher than in April, and up 4,400 from a year earlier.
“It’s a volatile industry,” Gibson said. “It’s clearly not growing as rapidly as it was in the early 1990s, but it’s still growing here in California.”
Although June’s job gains were far smaller than May’s unusually strong increase, analysts were pleased that brisk employment growth has continued. When May’s job numbers came out, some analysts were concerned that they were a statistical fluke.
But newly revised figures for May show that the state gained 57,200 jobs during the month, slightly more than previously reported. The May unemployment rate was also revised upward, to 5.3% from 5.2%.
Los Angeles County, ground zero of California’s economic collapse in the early 1990s, also hung on to recent gains. Its jobless rate in June was 5.6%, the same level as in May and down from 6.5% a year earlier.
One striking pattern that has emerged in recent job reports is the combination of low unemployment in some of the state’s biggest urban areas and high joblessness in rural counties. The urban jobs powerhouses included Orange County, whose unemployment level was 2.8% in June, up from 2.5% in May but down from 3% a year earlier.
San Francisco and Santa Clara counties posted jobless rates of 3.3% last month, and San Diego County was close behind at 3.4%.
“These are the tightest labor markets we’ve had in the state for three decades,” said Michael S. Bernick, director of the Employment Development Department.
In fact, the job market in much of Northern California, including the technology-rich San Jose area, is so tight that it appears to be limiting further employment gains.
“A couple of years ago we [Southern California] were the drag on the state economy. Now we’re chugging along nicely, but the Silicon Valley is the drag on [growth in] the state’s economy,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.
One of the payoffs of the strong employment market, Bernick contended, is a substantial drop in the state’s welfare rolls, because some people are landing jobs and getting off public assistance.
In addition, joblessness among minorities, though still far higher than among whites, has been on a downward trend. The unemployment rate for blacks inched down another tenth of a point in June to 8.8%, the lowest level this decade. Joblessness among Latinos also edged down, to 8.2%.
For all of its improvement since the early 1990s, California’s job market still lags behind much of the rest of the nation. The U.S. unemployment rate for June, reported two weeks ago, was 4.3%.
Rajeev Dhawan, a business forecaster at UCLA, said one of the most impressive features of the California economy is how it largely shrugged off the Asian economic crisis of the past two years. In manufacturing, he said, “we’ve seen some impact, but it’s not as bad as people thought it would be.”
Dhawan said his main concern about the future is whether the buoyant stock market, whose climb has brought new wealth to Silicon Valley and elsewhere, will continue. “We have gained a lot from the phenomenal run-up in the stock market in the last 3 years,” he said.
Other Southern California counties posted higher unemployment rates in June compared with May, but all were in better shape than a year earlier. Analysts noted that county-by-county figures are based on such small samples that they tend to be volatile.
Ventura County’s rate in June was 4.5%, up from 3.9% in May but down from 5% in June 1998.
Riverside County was at 5.5% last month, up from 5% in May but down from 6.4% in June 1998.
San Bernardino was at 5.6% last month, versus 4.7% in May, but down from 6.2% a year earlier.
For the most recent 12-month period, the Riverside-San Bernardino area continued to enjoy the fastest rate of job growth among the state’s 10 metropolitan areas. The employment total in the area climbed by 4%, or 34,900 jobs.
