State’s Jobless Rate Declines

California’s unemployment rate dipped to 6.3% in July, and employers reported a net increase of 7,500 jobs, more than the nation as a whole, according to figures released Friday by the state Employment Development Department.

The data might appear to be good news, contrasted with government figures released last week showing that employers nationwide boosted their payrolls by only 6,000 jobs in July. But economists cautioned that seasonal factors may be largely responsible for California’s gain, and pointed to abundant evidence of an anemic labor market.

The state still has 35,500 fewer nonfarm payroll jobs than it did a year ago, and more than half a million residents are receiving unemployment benefits. Hours worked in manufacturing declined over the month, underscoring continued weakness in that hard-hit sector. Even temporary help jobs, a much-watched bellwether of hiring, sagged in July, dashing hopes that California’s job creation is set for a strong rebound any time soon.

“Employers remain extremely cautious,” said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange. “They may not be laying off a lot of people, but they aren’t doing much hiring either.”

California’s 6.3% July jobless rate was down from a revised 6.5% in June. The U.S. unemployment rate in July was 5.9%, unchanged from the previous month.

The tally of monthly job gains and losses can be volatile, with data reported one month subject to revisions the next. Seasonal factors make the task even more difficult, which is why economists were particularly wary of data this month showing that government hiring was largely responsible for California’s July job gains.

Public payrolls showed an increase of 24,000 jobs, most of that coming from local schools. But education jobs are notoriously difficult to adjust for the summer exodus of teachers from their classrooms. On a non-adjusted basis, local education payrolls were down 112,000 jobs while state education positions dropped by 19,700. Thus the seasonally adjusted “gain” really means that teaching payrolls in July fell less than government counters would have expected in the height of summer.

“It’s one of the harder seasonal trends to capture,” said Tom Lieser, senior economist with the UCLA Anderson Forecast, who doubts that government hiring is having much influence on the state’s labor market, given California’s budget woes.

Wholesale trade and retail trade also showed small gains over the month.

But a greater number of sectors showed job losses, led by manufacturing, whose employers shed 9,900 additional jobs in July.

California’s manufacturing sector, like that of the nation, has been hammered by the economic downturn. The nation’s factories got a boost in the first quarter as U.S. companies restocked depleted inventory.

But signs have emerged that this momentum is slowing. A leading index of factory activity released this month showed that U.S. manufacturing growth stalled in July after several months of gains. In California, the manufacturing workweek dropped steeply to 40.1 hours in July from 41 hours in June.

“That’s not encouraging,” said Howard Roth, chief economist with the California Department of Finance.

Roth was similarly disappointed by data showing that payrolls of personnel supply firms were down 1,800 in July and remain 17,500 jobs lower than they were a year earlier.

Temporary workers are a good barometer for future hiring because employers who get an uptick in orders frequently take on temps before adding workers to their payrolls.

Orange County’s unemployment remained unchanged at 4.1% in July. Ditto for San Diego County at 4.2% and San Bernardino County at 5.8%. Ventura County’s jobless rate increased to 5.3% last month from 4.9% in June.

Riverside County’s jobless rate jumped to 6.7% in July from 5.8% the month before, mainly because of higher agricultural unemployment in the Coachella Valley.

Meanwhile, Los Angeles County showed a decline in its unemployment rate to 6.7% in July from 7.3% in June.

However, economists said the difficulties in adjusting for seasonal fluctuations in teaching employment make it more likely that L.A.’s unemployment rate didn’t change much from the previous month