State Jobless Rate Falls to 6.1% in February

California’s jobless rate declined to 6.1% in February, adding to the recent spate of upbeat news pointing to an economy on the mend.

February’s drop from January’s revised 6.4% rate marked the largest monthly decline in state unemployment since March 1994. Most regions of the state, including hard-hit Silicon Valley, saw unemployment ease.

Southern California continued to post some of the lowest unemployment figures in the state, led by Orange County, which saw its February rate drop to 3.6% from 3.9% in January, and San Diego, whose rate declined to 3.7% from 4.1%. Los Angeles County likewise saw its unemployment fall to 6.4% in February from a revised 6.6% the month before.

Still, California’s employment picture remains decidedly mixed. The state also reported Friday that California employers cut their payrolls by 4,700 jobs last month, while January’s revised job gains were only about half of the 30,200 jobs previously reported. Compared with February 2001, California has 51,200 fewer nonfarm payroll jobs than it did a year ago.

It might seem counterintuitive that unemployment could be falling if employers aren’t hiring. But Michael Bernick, director of the state Employment Development Department, credits the drop in joblessness to a rise in self-employment, a phenomenon typically seen during periods of anemic job growth, as people who can’t find work create their own.

A record number of Californians--16.5 million--were working in February, with an estimated 1.6million of them involved in activity that doesn’t show up on someone else’s payroll.

“These figures show the dynamism of the California economy,” Bernick said. “It reflects the strong entrepreneurial ethos at work here.”

Illustrating that spirit are people such as Sarah Ratliff. Laid off from her marketing job in January, the Fillmore, Calif., resident opted to launch her own event-planning business, Purple Works Party Planning.

“I didn’t want to work for someone else and get laid off again,” said Ratliff, 35. “Starting a business was a way to have some control.”

The February decline in California’s jobless figures mirrored the performance of the U.S. jobless rate. As reported last week, U.S. unemployment declined to 5.5% from 5.6% in January, its second straight monthly drop and the lowest rate since October.

Still, some analysts say it’s premature to conclude that California and U.S. rates have peaked. Employment is a lagging indicator that often continues to rise even after an economic turnaround is underway. In addition, employment statistics are notoriously difficult to adjust for seasonal variation during the winter months, a task made even trickier this year given mild weather in much of the nation.

Howard Roth, chief economist with the California Department of Finance, said the statewide unemployment rate may creep up to about 6.5% over the next few months if sluggish job growth continues.

February’s decrease in nonfarm payroll jobs “was a disappointment,” Roth said. “We probably won’t generate enough new jobs to keep the unemployment rate from going up a bit.”

Economists also point to the challenges of interpreting monthly data that typically undergo revisions the next month.

January’s revised jobless rate turned out to be higher than initial calculations, for example, because of a large number of unemployment claims reported after the preliminary figures were first tallied. Tens of thousands of unemployed Californians laid off in late 2001 delayed filing until January 2002 in order to take advantage of higher benefits phased in after the first of the year. The resulting spike in unemployment in January was the largest monthly increase since February 1992.

Four sectors--construction, wholesale trade, retail and government--added a total of 20,200 jobs in February. Construction showed the largest increase, adding 8,500 jobs. But those gains were more than offset by a combined loss of 24,900 jobs in services, manufacturing, transportation, public utilities, finance, insurance and real estate.

Employment in services posted the largest decline, down 17,600 because of continued losses in tech-related jobs such as computer programming.

The Latino unemployment rate edged down to 7.2% in February from 7.3% in January, but the rate for blacks jumped to 9.1% from 8.6% the previous month.

Colusa County posted the state’s highest unemployment at 26.1%. San Luis Obispo County posted the lowest at 3.1%.