State’s Jobless Rate Continues to Fall; Hits 4.8% in October
After hitting a 30-year low in September, California’s unemployment rate dropped even further last month as the state’s vigorous economy sailed ahead.
Officials said Friday that nonfarm employers statewide added 26,000 net jobs in October, slightly smaller than previous months but still a healthy level. Joblessness dropped to 4.8% from 4.9% in September, when the rate dipped below 5% for the first time since December 1969.
Although analysts had wondered whether the generation-low jobless rate could last, Friday’s report removed such doubts and raised the prospect that California’s economy, like the nation’s, may be in for a sustained period of very low unemployment with minuscule inflation.
“There’s no reason to suspect that it won’t continue,” said Michael Bernick, director of the state’s Employment Development Department, which released Friday’s report.
But the tightening labor market does appear to be constraining California’s overall job growth. Through October, employers have added about 30,000 net jobs a month this year, compared to a monthly average of 40,000 in 1998, according to the employment agency’s official estimates.
Other state payroll reports suggest job growth this year has been stronger than those estimates. Even so, many do see the hiring pace slowing in the sizzling construction industry and in the finance and retail trades. And manufacturing remains weak, notably aerospace.
Aircraft and parts makers shed another 1,200 jobs last month. The industry has now eliminated about 13,000 jobs in California in the last year, reflecting layoffs at Boeing and Northrop Grumman and the continuing decline in California’s share of U.S. defense spending.
While aerospace cutbacks are likely to go on for a while, the good news is that in this strong economy, many of those displaced are finding new jobs fairly quickly.
Steve Dettwiler, 44, said Friday that it took him just about a month to find work after getting laid off from Boeing’s plant in Monrovia earlier this year.
“I wasn’t worried,” said Dettwiler, a mechanic who found a better-paying job at ACE Clearwater Enterprises, a metal welding and assembly firm in Torrance.
Indeed, Friday’s jobs report showed that 41% of the 805,000 Californians who were jobless in October had been unemployed for fewer than five weeks. By comparison, five years earlier, when 1.25 million Californians were out of work, 70% of them had been unemployed for more than five weeks.
The latest report also showed a continuing decline in minority unemployment. The jobless rate for Latinos fell to 7.3% in October--down from 8.4% a year ago and the lowest in at least a decade. Black unemployment was 8.7% last month, down from 11.2% in October 1998.
Last month, the sprawling services industry--from child-care providers to engineering firms--accounted for 16,000 of the 26,000 net new jobs. Hotels and amusement parks added more than 5,000 workers between them. But higher-paying services, including computer services and engineering and management firms, added a hearty batch of jobs as well.
According to other new state data, Internet firms in California have tripled their employment from March 1997 to March 1999, to 27,000. And their average annual wages have doubled in that time, to $95,000.
Regionally, the Riverside-San Bernardino area led all metro areas in California in job growth, followed by Orange and Ventura counties. Los Angeles County was in the middle, and high-cost San Francisco and San Jose, which took a harder blow from the Asian economic crisis, trailed.
Unemployment rates within California continued to vary widely. Joblessness in Los Angeles County, the only county where the unemployment rate is seasonally adjusted, declined to 5.8% in October from a revised 5.9% in September. Unemployment in Orange County fell to 2.5% from 2.7%, and it fell in the Riverside-San Bernardino area to 5% from 5.3%.
Jobless rates in the Bay Area remained unusually low, while they rose even higher into double digits in some parts of the Central Valley, due to seasonal employment lulls in agriculture.
As in the nation, wages have risen only slightly in California over the last year, despite the ever-tightening labor market. Average hourly earnings in manufacturing were $14.03 in October, up 2% from a year ago. Construction workers earned an average $22.09 an hour last month, 1% higher than the previous year.
The retail industry saw the biggest gain in hourly wages, 3% over the year, to $10.92. That reflects the robust sales gains this year, plus employers’ increasing difficulties in finding workers to take these jobs.
Wage data on services aren’t available, and workers’ benefits and bonuses have increased more broadly. Still, on the whole, “wage inflation is astoundingly low,” said Ted Gibson, chief economist at the Finance Department.
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Another Decline
The percentage of Californians in the labor force who are unemployed continued to fall in October. Monthly jobless rate:
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October: 4.8%
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Source: Employment Development Dept.
