State’s Jobless Rate Rises Slightly to 4.7% in March

California’s jobless rate edged up to 4.7% in March, the first unemployment increase in nine months and a strong clue that the U.S. downturn, dot-com failures and electricity troubles have begun undermining the state’s economy.

The employment report released Friday by state officials reflected a rise in joblessness from 4.5% in February. Analysts said the latest employment figures and other recent economic indicators generally show that California has shifted from boom times to a moderate slowdown.

“We now are feeling the effects of the national slowdown, there’s no question about it,” said Ted Gibson, chief economist for the California Department of Finance.

In Orange County, however, unemployment stood at a scant 2.4%, the same as February’s revised rate.

Economists noted that during the first quarter of the year, California added only 13,100 jobs a month, down from an average of 46,200 last year. The state also reported that withholding taxes drawn from Californians’ paychecks declined by 1% in March, after soaring last year and continuing to climb briskly in the first two months of this year. Analysts attributed the decline to slowing job and wage growth, along with a drop in profits from stock options.

The technology-heavy Bay Area appears to be taking the biggest stumble in the state, but growth in Southern California has lost a step too. The jobless rate for Los Angeles County inched up to 4.8% in March, from 4.7% in February.

Still, even with the upturn in joblessness and the apparent beginning of the much-anticipated state slowdown, the latest figures reflect an economy that is far from sinking into recession. California’s jobless rate is back to where it stood in December and remains close to its lowest level in more than 30 years.

Indeed, Orange County has gained 46,000 jobs since March 2000, a healthy 3.3% growth rate. But year-over-year growth was 3.5% in February and 3.7% in January.

“Orange County and Southern California as a whole are continuing to add jobs, but the rate of growth has substantially slowed down,” said Esmael Adibi, director of the Center for Economic Research at Chapman University. “We expect this to continue throughout the year.

“We are not going to be immune from the slowdown happening at the national level; we cannot avoid that completely,” Adibi added. “But we are in much better shape than the nation, even at this stage of the game.”

What’s more, state officials noted that California managed to put more people to work last month even as the national economy, as previously reported, lost 86,000 jobs. The rise in joblessness statewide largely stemmed from an influx of new job hunters and not just from layoffs and other cutbacks.

“We are still outpacing the nation,” Gibson said. The phenomenon of immigrants and job hunters from other states flocking to California, pushing up the unemployment rate, “is what happens in California when the economy does well.”

In fact, by one survey, California added a strong 56,900 jobs in March. But analysts said a more reliable gauge appears to be the state’s job tally from the past three months, which shows a far slower rate of job growth than last year.

“The first quarter was really pretty weak,” said Tom Lieser, senior economist with the UCLA Anderson Business Forecast.

Lieser noted that manufacturing, which has declined sharply across the country, also is falling in California, albeit moderately. Experts say that the state’s rolling blackouts, a result of the current electricity crisis, may be partly to blame. Another worrisome sign, Lieser said, is that California’s pace of growth has slowed in business services employment, a major driver of the economy that includes lots of computer-related jobs.

On top of that, a linchpin of Southern California’s economy--the motion picture industry--also appears to have begun declining. One narrow measure of the industry’s employment shows its job total slipping in the first quarter by 3,400 jobs, to 189,067.

Analysts have expressed concern that if labor contract talks in the entertainment industry break down and lead to a protracted strike--a writers’ walkout could come as soon as next month--the toll on Los Angeles’ economy would be heavy. But the decline in motion picture jobs that already has occurred suggests that the entertainment industry will soften even if there is no strike.

Even so, the Bay Area--which boomed during the California recovery while the Southland grew much more moderately--now appears on the verge of falling much faster. Although the Bay Area continues to report far lower unemployment and much greater personal income than the Southland, the pattern appears to be shifting.

The evidence from the Bay Area includes slowing home sales and increasing amounts of vacant office space. A torrent of dot-com companies have shut down, and Silicon Valley’s technology giants have announced giant layoffs.

Another sign of the apparent trend: The jobless rate in the nine-county Bay Area edged up to 2.6% in March, from 2.5% in February. The impact in Santa Clara County, home to San Jose and the Silicon Valley, was even clearer. The county’s jobless rate moved up to 2.2% last month, up from 1.8% in February.

The southern part of the state--from Ventura County to Mexico--posted a decline in joblessness to 4%, from 4.1% the month before.

Economists emphasized that in all of the state’s major urban areas, unemployment remains extremely low by historical standards.

Unemployment for California rose a moderate 0.2% from February, which had posted the lowest jobless rate in the state since December 1969.

Likewise, unemployment in Los Angeles County is just 0.1% above February’s level, which by some assessments also was the lowest joblessness since 1969.

“Overall, this is a picture of a pretty healthy regional economy,” said Lisa M. Grobar, director of the Cal State Long Beach Economic Forecast Project.

The latest employment figures, she said, are “consistent with the idea that we will be affected by the national slowdown, but in relation to the U.S., we’re doing quite well still.”

One of the greatest worries for California, if the state moves into a pattern of slower growth, is the situation in rural areas that never reaped the benefits of the recovery. Last month, for instance, the county with the highest joblessness in the state was Colusa, at 24.7%, followed by Tulare, at 18.5%.

The lowest jobless rates among California’s 58 counties came in San Mateo and Marin, which both reported a level of 1.7%.

Yet the state’s low-unemployment urban areas also have problems that haven’t been repaired by the state’s recovery from its deep recession in the early 1990s. Even during the recovery, the state’s income gap continued to widen between the wealthy urban elite and the poor, mainly minorities.

Although unemployment fell sharply among minorities over the past year, the rate among Latinos last month was 6.7%, up from 6.6% in February and above the record low of 6.4% set last year. For blacks, however, the jobless rate was 7.3%, bringing it back to its record low.

Nationally, as reported a week ago, unemployment was 4.3% in March. That was up from 4.2% in February and the highest level in 20 months.

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Times staff writer Leslie Earnest in Orange County contributed to this report.