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Orange County's Jobless Rate Dips to Record Low of 2.5% in December

January 29, 1988|MICHAEL FLAGG | Times Staff Writer

The unemployment rate in Orange County dropped to a record 2.5% in December as retailers hired nearly 5,000 temporary employees for the Christmas shopping rush.

The rate in November was 3%, the previous record low.

A statistical anomaly caused by an adjustment of the employment figures means that the December figure probably isn't precise, according to the Employment Development Department of California.

Even if the adjustment had not been made, though, the department said the December rate would probably have fallen within a range of 2.5% to 3%.

The only other California county to post a 2.5% unemployment rate for December was San Mateo County on the affluent San Francisco Peninsula.

Experts warned against reading too much into December's low county rate, noting that one-month changes in the county jobless index aren't very significant statistically.

Even so, December's 2.5% was probably the lowest rate for Orange County since the Employment Development Department began keeping records, said Daniel Johnson, a labor market analyst for the Employment Development Department.

The county's strong economy has kept the unemployment rate significantly lower than U.S. and state averages.

The comparable state unemployment rate in December was 4.9%, the U.S. rate 5.4%. Both figures were also at or near record lows.

Unfortunately, Orange County's low rate probably won't last. The county economy--along with the state and national economies--is expected to slow this year.

Over the long run, the county unemployment rate has probably hit bottom and may soon start upward again, Johnson said.

The county's jobless rate will probably rise above 3% this month, he said, because most of the employees added by retailers during Christmas only filled temporary jobs.

Trouble Spots Cited

Despite the unusually low unemployment rate, there were some trouble spots in the the county's job market. While local retailers displayed much optimism at year's end, the financial industry began seeing layoffs caused by big mergers and the October stock market collapse.

The number of people employed in the finance, insurance and real estate category dropped by 500, or a little less than 1%, to 84,400.

"Most of those lost jobs were jobs in brokerages, and most of them were after October," Johnson said.

The county's high-technology companies as a group also did little or no hiring last year, according to figures released by the state agency.

The number of workers employed by manufacturers of electrical and electronic machines dropped 2% from the end of 1986 to December, 1987, falling to 62,600.

"I wouldn't say this was a trend," said Jeff Kilpatrick, president of Newport Securities Corp. in Newport Beach, which tracks the county's technology companies.

Many 'Did Pretty Nicely'

"On the whole, a lot of companies did pretty nicely last year."

But one group of companies that didn't do well were manufacturers of products to boost the computing power or enhance the graphics of computers made by other companies, Kilpatrick said. Stiff competition hurt some of those firms last year.

And many technology employers have been cautious about hiring large numbers of new employees recently while they wait to see whether the economy takes a dive, Kilpatrick said.

Meanwhile most categories of jobs in non-manufacturing industries continued to grow rapidly in the county.

Jobs in the service industries--everything from low-wage jobs in fast-food restaurants to professional positions such as architects--grew 5%, adding 14,000 jobs for a total of 276,000. Retailers added nearly 8% more jobs in the year, for a total of 226,500.

Figures Hint Strong Year

Meanwhile, preliminary figures indicate that 1987 was another year of strong job growth in the county.

The Employment Development Department said the number of county jobs grew by 50,000, to 1.27 million, for a gain of 4% during 1987.

The number of unemployed in the county in December was estimated by the department at 33,000.

But the department cautioned that the figure may also be too low because of statistical adjustments in the way the number is calculated.

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