State’s Jobless Rate Decreases; O.C.’s Edges Up
California’s unemployment rate dipped to its lowest level in more than three decades last month, an apparent show of economic strength that defied the nation’s slowdown and the state’s energy crunch. The jobless level fell to 4.5% in January, down from a revised 4.7% in December.
Officials also announced Friday that California gained more than half a million jobs in 2000, the best yearlong performance since 1978, according to the state’s annual reassessment of employment figures.
The state’s revisions boosted Orange County’s job count last year by 5,600. That means the county added a net 46,500 new positions in 2000--an impressive gain of 3.4% from the previous year, when the county also produced about the same number of jobs.
Friday’s report showed the growth pushed into January, although Orange County’s seasonally unadjusted unemployment rate edged up to 2.3% from the record low of 2% in December.
“This report doesn’t show any sign of a slowing in the local economy,” said Esmael Adibi, director of the Center for Economic Research at Chapman University in Orange. “That is the startling factor.”
But not all of California’s economic news was good. In Los Angeles County, which never enjoyed a boom rivaling neighboring counties’ since the late 1990s, unemployment increased slightly to 5.2% in January, from a revised 5.1% the month before.
What’s more, a separate employment survey that normally is one of the most trusted state economic measures showed a loss of 50,200 jobs statewide in January from the previous month. Most analysts discounted that report, however, maintaining that last month’s figures were skewed by quirks in government techniques for calculating job totals.
Taken together, the flood of employment figures was a pleasant surprise for analysts who track the economy. Though the state’s most prominent business forecasters have said they expect California to avoid falling into recession this year, some believe an energy-related slowdown might already have begun.
Now, however, it appears that the momentum from last year’s boom continued into January.
The last time California’s unemployment dipped lower was December 1969, the height of the Vietnam War, when the rate was 4.4%.
The state’s generally rosy unemployment numbers joined other recent indicators in portraying the California economy as a still-buoyant force. For instance, an analysis showed that the number of initial claims for unemployment insurance last month was the lowest in 13 years in California. In addition, state general fund tax revenue was unusually strong, coming in at 9.1%, or $854 million, more than forecast.
Nationally, as previously reported, unemployment rose to 4.2% in January, up from 4% in December.
Ted Gibson, chief economist for the California Department of Finance, said he still expects the energy crunch and the national downturn to slow the state economy soon, “but we didn’t see it in January.”
Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., was even more upbeat: “A lot of East Coast analysts were saying that energy could pull California into recession, and that could then pull the nation as well into recession. But this shows that the California economy still is rolling.”
Additional evidence that the state’s energy crisis has yet to take a heavy toll came from the California Employment Development Department. It reported that fewer than 1% of the more than 300,000 Californians who applied for unemployment insurance from Jan. 1 through the first half of February said their joblessness was linked to the energy crunch.
Michael S. Bernick, the EDD director, said his agency’s offices around the state still are being flooded with requests from employers for workers.
The outlook for the coming months, however, is clouded by an array of factors along with the national slowdown and California energy woes. They include the recent decline in technology spending--a major blow to the Bay Area--and the possibility of strikes in Hollywood. Some analysts fear that weakness in Japan and other East Asian nations that are major California trading partners could sting the state. Likewise, continued softness in the stock market might hurt consumer spending and jeopardize home values, particularly in areas such as the Silicon Valley.
“We’re not going to stay at this level as we move through the year,” economist Adibi said of Orange County’s pace of job creation. “Eventually the national economy is going to drag us down too.”
January’s job tally for the county was nearly 4% higher than January 2000. Employment growth was particularly strong in construction and the sprawling services sector, partly reflecting the flurry of work in the expanded Disneyland Resort area.
In California, “we’ve probably seen the best of the employment news for a while,” said Brad Williams, senior economist for the state legislative analyst’s office. “We see a slowdown coming in the first half of this year and going into the second half of the year.”
One possible sign of the coming trend: A new quarterly survey from the Manpower Inc. employment services company shows that in downtown Los Angeles and nearby areas, only 15% of employers plan to add workers this spring. In contrast, 30% expect to cut jobs, and the rest plan no changes or aren’t sure what they will do.
The Manpower survey showed lowered expectations from Orange County employers as well.
“This is the first time in three years that we’ve seen people holding back and not planning to hire the number of people they had before,” said Sue Foigelman, Manpower’s area manager. “Some of them are experiencing slowdowns in orders, and their overall business is not as buoyant, generally speaking, as it was this time last year.”
Most cautious were the wholesale and retail trades and manufacturers of nondurable goods, she said.
Like Orange County, all other Southern California counties posted increases in their unemployment rates. Unlike California and Los Angeles County, though, the numbers for Orange and the other Southern California counties are not adjusted for seasonal trends.
As a result, analysts said, the rising unemployment reported outside of Los Angeles County may have resulted largely from such factors as the traditional loss of retailing jobs in January, after the holiday shopping season. That trend is filtered out in the seasonal adjustments included in the California and Los Angeles numbers.
In other Southern California counties, unemployment rates were as follows:
* Riverside: 4.7% last month, up from 4.4% in December, but down from 5.2% in January 2000.
* San Bernardino, 4.6% last month, up from 3.8% in December, but down from 4.8% a year ago.
* San Diego, 2.7% last month, versus 2.4% in December, but down from 3.1% a year earlier.
* Ventura, 4.4% last month versus 4.1% in December but down from 4.8% in January 2000.
The finding of California’s 50,200-job loss last month in one of the employment surveys may have stemmed from faulty seasonal adjustments, analysts said. In addition, fewer employers than usual responded to the monthly state survey in time for their work forces to be included in the overall estimates, officials said.
But the annual reassessment of the state’s employment figures--known as the “benchmarking” among economists--yielded upbeat results. It lifted the state’s nonfarm job total by 144,400 at the end of last year to more than 14.7 million.
All told, the average employment level among nonfarm workers was up 526,700 last year. That was up from 1999’s gain of 395,800, and the biggest increase since 1978.
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Jobless Rate Up
Orange County’s unemployment rate, which is not seasonally adjusted, increased to 2.3% in January after reaching an all-time low of 2% in December.
The monthly trend:
January 2000: 2.7%
January 2001: 2.3%
