Jobless Rate in State Edges Up to 5% in May

Signaling that California’s robust economic expansion may be losing a little steam, the state’s unemployment rate edged back up to 5% in May, from 4.8% in April.

Analysts said the report released Friday suggests that the interest rate increases by the Federal Reserve, which apparently are subduing the national economy, are beginning to be felt in California too.

But the report, from the state Employment Development Department, showed little evidence of a slowdown in Orange County.

The county’s jobless rate held steady in May at 2.3%, near an all-time low. A separate survey of employers found the county maintaining its momentum in job growth. Last month, the county’s total nonfarm payrolls stood at 1.39 million--up about 45,000 from May of 1999. That’s a robust growth rate of 3.3%.

Statewide, the job market also appears to have more momentum than elsewhere in the nation. The state’s private-sector employers added 17,700 workers in May even as the nation as a whole, as previously reported, lost 116,000 private-sector jobs.

Still, the state’s private-sector job gains were down from a monthly average of 29,208 over the last year.

“We may be seeing the first signs that there is some effect of credit-tightening” by the Fed, said Tom Lieser, executive director of the UCLA Anderson Business Forecast.

California, which was particularly hard hit by the recession in the early 1990s, continues to report unemployment levels above the national average. The U.S. rate in May was 4.1%, up from a 30-year low of 3.9% in April.

Jobless rates remain particularly high in Central California and other areas dependent on the farm economy. Imperial County posted the worst joblessness in California last month, with a rate of 21.2%.

Los Angeles County, which has lagged other urban areas of the state in economic growth, posted a jobless rate of 5.6% in May, up from 5.5% in April.

What both inflated California’s job total last month and kept the nation from showing employment losses was heavy hiring by the federal government of temporary workers to carry out the Census 2000 count. In California during May, the number of government jobs jumped by 41,700, accounting for 70% of the overall employment increase of 59,400.

But California continues to gain longer-term and private-sector employment too. After government, the sector with the biggest job gains was services, which was up 9,600. That largely reflected growth in business services, an area that includes software and computer professionals.

Michael S. Bernick, director of the state’s Employment Development Department, said California employers continue to grumble about a shortage of available workers, particularly those with sophisticated computer and software skills. “The main story is how tight the labor markets are,” he said.

In another sign of California’s continuing momentum, the state added 1,300 manufacturing jobs in May, while the nation lost 17,000.

Even if rising interest rates pose a threat to construction and other important California industries, the state also has factors working in its favor. New reports show that California’s exports of goods to foreign markets climbed 17.5% in the first quarter of this year, and state tax revenue has exceeded the latest forecasts.

“We’re still cruising along pretty well, and I don’t see much that would slow things down,”’ said Ted Gibson, economist for the State Department of Finance.

Lieser, though somewhat less optimistic, predicted that the state’s economic growth through the rest of the year “may be slower, but still pretty strong.”

Economists said the May employment figures, both for California and the nation, may have been skewed somewhat because they were collected earlier in the month than usual. That could have had the effect of raising jobless rates slightly by including, as unemployed, college students who had just begun to look for summer jobs. In fact, the rise in California’s unemployment level largely reflected an influx of new job hunters, rather than major employment losses.

While jobless levels rose last month nationwide for minorities, they held steady at record lows in California. Among California’s Latinos, unemployment remained for a second month at 6.5% in May, the lowest level since the state started keeping figures for racial and ethnic groups in 1988. For blacks, unemployment last month stayed at its record low of 8.3%.

The overall California unemployment rate, at 5%, is back to where it was in March. It hit a 30-year low of 4.6% in February. In May a year ago, the state jobless rate was 5.3%.

In other Southern California counties, the jobless rates were:

Ventura: 3.6% in May, up from 3.5% in April.

San Diego, 2.7%, unchanged from April.

Riverside: 4.7%, up from 4.6%.

San Bernardino: 4.5%, up from 4.3%.

Unlike the statistics for California and Los Angeles County, the figures for other communities in the state are not adjusted for seasonal trends. Without the seasonal adjustments, the jobless rate for Los Angeles County would have been 5.3% in May, unchanged from April. For California, the comparable jobless figure would have been 4.6%, down from 4.7% the month before.

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Holding Steady

Orange County’s unemployment rate remained at 2.3% in April. The monthly trend:

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1999 January 3.0% February 2.8% March 2.6% April 2.5% May 2.5% June 2.8% July 3.0% August 2.7% September 2.7% October 2.6% November 2.4% December 2.2% 2000 January 2.6% February 2.3% March 2.4% April 2.3% May 2.3%

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Source: California Employment Development Dept.