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Unemployment in O.C. Hits Highest Level in 3 1/2 Years : Jobs: The county's jobless rate rose to 3.8% last month while job growth fell to an annual rate of 1.1%, the slowest since 1982-83. Lack of construction and retail positions boosted the unemployment rate.

October 26, 1990|JOHN O'DELL | TIMES STAFF WRITER

ANAHEIM — Unemployment in Orange County rose to its highest level in more than 3 1/2 years in September, while job growth was the slowest since the 1982-83 recession.

In another strong signal that the local economy is sputtering, the county's jobless rate rose to 3.8% last month from 3.3% in August, the state Employment Development Department reported. Last month's rate, however, was still the best of all the state's major job centers.

The September rate was the highest in the county since the 4.1% jobless figure recorded in January, 1987. Job growth in the county fell to an annual rate of 1.1% last month.

The sagging employment scene bolsters predictions that the county is unlikely to escape a national recession that economists say has either already begun or will do so by early next year.

The increase in joblessness in the county last month was driven by a plunge in construction and retail jobs, as builders stopped launching new projects and retailers and tourist-related businesses laid off seasonal workers after a disappointing summer.

Construction employment in the county fell by 1,200 jobs from August to a total of 68,400 positions in September, said Eleanor Jordan, an EDD labor market analyst.

The construction industry has lost 7,500 jobs since September, 1989, a 10% drop in total jobs.

Retail employment, led by a decline of 1,000 jobs in retail clothing stores in the county during the month, fell by 2,100 positions to a total of 226,700 jobs from 228,800 in August, Jordan said.

And tourism-related employment was off 2,200 jobs to 136,500 positions in September.

But Janet Strand, an administrator with the EDD's Orange County-Inland Empire office in Anaheim, said there are indications that a weak summer, particularly among retailers, will have a lasting impact that includes less holiday hiring.

"We just aren't seeing the early winter season hiring that usually starts about now," Strand said.

Regional economists differ on how serious the local downturn will be, but they generally agree that the near-term trend is not favorable.

The slowing of the county's population growth means job growth also will continue to decline next year, said Phillip Vincent, a vice president and economist for First Interstate Bank in Los Angeles.

At the same time, a weakening economy should push unemployment somewhat higher, he said. Vincent is predicting a 3.4% annual jobless rate for the county this year and a 3.5% annual rate in 1991.

Vincent said increasing unemployment has a greater impact on the economy in Orange County than it does in other areas.

That's because increases in the jobless rate sometimes occur when out-of-work people move into an area to find jobs, swelling the labor pool. In those cases, however, current residents aren't necessarily losing their jobs and are still putting money into the economy.

In Orange County, however, the labor pool is not growing, so people who lose their jobs are those who already live here. And that means they spend less to support the local economy.

Chapman College economist James Doti says this so-called ripple effect is likely to be felt during the first half of next year and may be more damaging than Vincent and some other economists anticipate.

Doti, who defines a local recession as a sustained period of employment shrinkage, said he expects one to begin no later than the first quarter of 1991.

He said declines in local construction will drive the economic slump and cautioned that the drops in construction employment in August and September portend deeper troubles in coming months.

The brunt of a construction decline isn't felt for several months after it begins, he said, because it takes that long for the impact to ripple through the economy.

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