Jobless top 1 million in California
Despite a boost from the Hollywood job machine, the state unemployment rate ticked up in September, when more than 1 million Californians were looking for work, the first time that benchmark had been breached in nearly three years.
Jobs were added to the economy during the month but nearly half were in Los Angeles in the entertainment sector, according to figures released by the government Friday. Producers have been racing to get movies and television shows in the can in anticipation of a writers strike.
And Hollywood probably won’t deliver a happy ending. Strike or no, when the shows and movies are finished, many of those jobs will evaporate.
Last month the unemployment rate rose to 5.6% from 5.5% in August. It would have been worse if 18,400 jobs had not been created. The net increase was 9,300 because the state shed 9,100 jobs in September, according to the Employment Development Department’s survey of payrolls. Hollywood’s contribution was about 8,000.
Many economists said they expected joblessness to rise in the coming year.
The most recent UCLA Anderson Forecast, for example, said the unemployment rate could hit 6%. Ryan Ratcliff, a UCLA economist, saw nothing in Friday’s jobs report to change that outlook, but he didn’t anticipate a recession.
“We’re going to have a near-miss,” he said.
The housing slump and mortgage meltdown were behind the biggest job losses in the state last month. The construction sector got rid of 5,000 jobs, bringing the number lost over the last year to 28,600 for a 3% decline, the Employment Development Department said.
As the pace of job creation slowed in September -- the addition in August was 21,900 -- the number of unemployed Californians grew to 1.03 million, up 33,000 from August and 162,000 from September 2006.
Esmael Adibi, an economist at Chapman University, said it was important to note that payroll job growth had slowed to 1.1% in September from 1.6% in January and that beyond construction and financial services, the professional business services sector jettisoned jobs in September.
“Every indication is the weakness is becoming more broad-based,” he said. “Retailers are getting nervous about consumer spending, and clearly they are not adding to the employment base. The job machine is getting tired.”
The last time state unemployment topped 1 million was January 2005. Back then, the joblessness was viewed as a sign of a nascent recovery, a side effect of job seekers flooding into a market that would eventually take most of them in.
This time, economists said, the story is just the opposite.
“It’s one thing to have 1 million unemployed,” said Keitaro Matsuda, senior economist at Union Bank of California in San Francisco. “The question is which way are we going when we pass that marker? I’m more interested in the trend. . . . The trend is not good.”
A rising jobless rate in the face of continued, albeit sluggish, job growth occurs when people enter the labor market in greater numbers than positions are created. Entrants to the market include people dropping out of or graduating from school and people who move into the state.
It also reflects the movement of people from casual or self-employment -- as is common in construction, real estate sales and loan brokering -- and into the formal labor market.
The biggest gain in September was in the information sector, which added about 8,000 jobs, many of them in movie and television productions based in Los Angeles, the state figures show.
That level of activity is probably generating closer to 14,000 jobs in all, but many of them are hidden, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.
That’s because many television and film production jobs are informal, so they don’t show up in the payroll survey. Also, entertainment creates some jobs that are counted in the payroll survey but in other sectors. Set caterers, for instance, show up in the food-service category.