Forecast Says State’s Jobless Rate May Jump

Though California is weathering the recession better than much of the country, the state’s unemployment rate will increase “rather dramatically” this year, according to a forecast to be released today.

Economists at the Los Angeles County Economic Development Corp. predict the state’s jobless rate could climb to an average of 6.3% in 2002, up from an average of 5.2% last year.

“It’s going to be a rough first quarter,” said Jack Kyser, the group’s chief economist.

Though the national recession is proving to be a mild one, most economists say unemployment will continue to rise even as the economy recovers.

Kyser said unemployment in Los Angeles County, which bottomed out at 4.7% in February 2001, could reach 7% in coming months because of continued weakness in tourism, aerospace and manufacturing.

The county’s apparel sector, its largest manufacturing business, is expected to shed 3,500 jobs this year and an additional 2,800 in 2003 because of a continuing barrage of cheap imported clothing.

“In a word, the outlook for this industry is lousy,” the report said.

The economic forecast predicts that the Bay Area will continue to suffer the worst of any region in the state as it struggles to cope with the tech-sector crash, a steep decline in tourism and an oversupply of commercial office space.

After years of steady employment growth, California will lose 28,300 jobs this year--most of them in Northern California, according to the forecast.

“It’s going to be tough up in the Bay Area, no question,” Kyser said.

But statewide, the nonfarm job total is expected to recover to nearly 15 million jobs in 2003.

Continued weakness in Northern California will have repercussions for the state’s coffers this year. Growth in total personal income, a sizzling 9.8% in 2000--the last year of the tech boom--dropped to 1.4% in 2001 and will edge up only slightly this year, to 2.4%, the economic group said.

The economic development group expects the state’s residential real estate sector to remain healthy.