Despite a slight uptick in the unemployment rate in January, Los Angeles County appears poised for steady improvement in 2013 along with the rest of the Golden State.
The seasonally adjusted jobless rate in the county rose at the beginning of the year to 10.4% from 10.3% in December, according to data released Friday by the state Employment Development Department. That compares with 9.8% in January for California as a whole, unchanged from the month before.
Los Angeles has lagged behind many other coastal counties, such as Orange, San Diego and San Francisco, in the recovery. Economists say the slower growth can be attributed partly to the county’s diverse economy as well as ties to the sluggish global economy through tourism and the ports.
“L.A. County is in recovery and there is a long way to go,” said Stephen Levy, a senior economist with the Center for Continuing Study of the California Economy. “The county is more tied to national growth trends and what goes on in Asia, because tourism and foreign trade are two huge sectors.”
“Southern California will do slightly better than the nation in 2013,” he said. “I think the strongest areas in California will be the Bay Area and San Diego, but I expect Southern California to be right up there in growth.”
Mark Rossmeisl, a 54-year-old actor and musician, knows firsthand how hard it can be to find reliable work. After acting gigs dried up during the recession, he has worked stints as a mover and a Liberty Tax sign spinner to make ends meet. But lately he’s been booking more jobs, including a role as a boxing instructor in an independent movie.
“It was pretty bad for a while. I was doing anything I could find,” the Koreatown resident said. “But there seems to be more out there in the last few months.”
Last year, Los Angeles County’s nonfarm payrolls grew 1.9%, for a net gain of 73,800 new jobs. That growth was below the 2% gain enjoyed by the state.
In January, the county’s employers shed a net total of 81,000 nonfarm jobs. By comparison, San Diego County lost 22,000 jobs, Orange County dropped 28,000 and the combined counties of San Francisco, San Mateo and Marin shed 17,700.
Economists pointed out that nearly a quarter of Los Angeles County’s losses — or 19,700 — came from the retail sector, which temporarily beefs up its workforce during the busy holiday shopping season.
“Those numbers don’t take into account seasonal patterns,” said Jerry Nickelsburg, a senior economist at UCLA. “You expect January and February layoffs of certain seasonal workers in retail who have been hired previously in November and December. Those layoffs are normal.”
The construction sector was a bright spot, with Los Angeles adding 800 jobs.
A revived California housing market, which was pummeled during the Great Recession, will go a long way to creating new jobs in the Southland and around the state, economists said.
Median home prices in Southern California jumped 23.5% in January compared with the same month a year earlier, according to research firm DataQuick. A recent surge in demand for homes is creating a tight supply of houses and pushing builders to start construction again.
“The growth rate in 2013 is going to be much higher than we previously thought because construction is running higher,” Levy said. “The strength of the recovery will depend on a construction revival, just like it was that sector that dragged down Southern California.”
That could be good news for Franz Hockenbrouch, 34, who has been unemployed for two years. The Los Angeles resident said he’s finally getting responses to applications sent to construction companies. But with two felony drug possession convictions, Hockenbrouch figures it will be a while yet before builders hire him.
“I think I will find something, but it will take longer,” he said. “They’ll offer jobs to people without a record first.”
A more robust construction sector may offset weakness in other areas.
In January, Los Angeles County lost 15,400 jobs in the information sector, which includes motion picture and sound recording gigs. Other sectors that experienced job loss include professional and business services, which lost 12,500 positions; leisure and hospitality, which shed 9,900; and education and health services, which dropped 7,000.
Esmael Adibi, director of Chapman University’s A. Gary Anderson Center for Economic Research, said California businesses may be pulling back slightly as a reaction to a payroll tax increase, the state’s recent implementation of a sales tax bump and increased tax on wealthy individuals. Sequestration, or the across-the-board federal spending cuts that went into effect March 1, may also be damping business and consumer confidence, he said.
The continued Eurozone drama, with a bank crisis in Cyprus, is also affecting transportation and warehousing businesses in Los Angeles County, economists said. A slowdown in global demand for consumer goods translates to less activity in Southland ports.
February employment figures for California will be released next Friday.