County Economy Hits Small Bump
The Ventura County unemployment rate inched up by one-tenth of a percentage point to 3.6% during May, but analysts say the Southern California economy is still soaring.
Job growth has begun to slow slightly to a rate of about 3.4%--with about 9,800 jobs added between this year and last. That is the lowest rate of new job openings in about two years, although analysts say it is still robust. Growth had been hovering in the area of 4% to 5% for the month of May.
Economists said employers may finally be looking at slowing expansion after the Federal Reserve’s series of interest rate hikes and a small stock market correction two months ago, but they cautioned about inferring too much from the small rise in unemployment.
“Employment may be slowing down. It would be consistent with what we’ve seen,” said Mark Schniepp, director of the Center for Regional Economic Research in Santa Barbara. “But, I don’t know that this means anything at this point.”
Some analysts said that bumps in the unemployment rate may occur because some technology workers have begun fleeing from Internet start-up companies to return to traditional firms because of worries that Wall Street’s ardor for cyberspace could be short-lived.
According to the report released Friday by the state’s Employment Development Department, the county added only 200 jobs from April to May.
Farming, government, manufacturing and construction added about 900 jobs, while about 700 jobs were cut in public utilities, trade and mining. Many of the government hirings were temporary, census-related jobs, said Sarah Parker, a labor market analyst with the EDD.
About 390,900 Ventura County residents are employed, down from 391,700 in April, according to the state’s figures. The county’s unemployment rate was 15th lowest among the state’s 58 counties. The statewide unemployment rate was 4.6%.
In year-to-year comparisons, which are more telling, the county has shown strong gains in business services and government hiring. In May of last year, the unemployment rate had reached a then 15-year record low of 3.8%.
Economists have warned for months that a slowdown is coming. Jack Kyser, chief economist at the Los Angeles Economic Development Corp., has begun to see fewer businesses inquiring about expansion in response to increases in interest rates.
“Business is taking a more cautious approach,” he said. “By the end of the year, you should see things moving slower.”
Kyser said that the potential meltdown of many dot-coms--some of which have been skating by on reputation alone--could mean relief for traditional firms that have been thirsting for talented employees in this drum-tight market.
“You’ll see the e-refugees coming into the market, and that could make things easier for business,” he said. “It was a very short-lived bubble more driven by overblown expectations.”
Economists say that shift is unlikely to ratchet up the employment rate much because the refugees won’t be in the job market long. For the time being, there is very little that could affect unemployment other than a natural slowing because of a lack of work force.
“An act of God has a higher probability of changing the course [of the economy] than anything else,” Schniepp said. “We certainly don’t see anything coming.”
