SACRAMENTO — California's jobless rate jumped to a seven-year high of 8.2% during June, sharply above the national average and a clear indication of the state's lagging recovery from the recession.
More than 1.2 million California workers were without jobs, half of them because they were laid off, the state Employment Development Department reported Friday. The rest either quit voluntarily or were entrants into the labor market.
The state figures are more volatile because the sampling on which they are based is far smaller than the federal sampling.
The nation's unemployment rate edged up slightly in June, the government reported, but economists said the increase was too small to reverse their conclusion that the year-old recession has come to an end.
The Labor Department's monthly report showed the jobless rate last month at 7%--up 0.1% from the previous month. At the same time, the number of jobs in the economy shrank a bit, dropping by 50,000 from their revised May levels.
The state jobless spiral was led by construction and durable-goods manufacturing, along with a poorer-than-expected showing in summer employment and a drop in mining and related industries.
Employment in durable goods production declined by 6.3% during the last year, while construction has dropped about 7.3%.
Pauline Sweezey, chief economist for the state Finance Department, said fiscal experts expected to see "unemployment to continue rising a bit. It's quite common for the unemployment rate to keep going up after the (economic) recovery has started."
The latest figures sharply surpassed May, which was 7.7%, and reflected a dramatic increase over the June, 1990, rate of 5.1%.
"It doesn't surprise us," said Bill George, a spokesman for the California Manufacturers Assn. "We're in a recession and obviously we need help to get out of the recession. Businesses are finding an increasing(ly) inhospitable climate in California and that will result in layoffs."
The number of people unemployed in California increased during June by 83,000 to 1,208,000. There were 759,000 jobless people in June, 1990.
Employment also increased as 98,000 more job-seekers entered the labor force. The number of people employed was 13,545,000 in June, compared with 13,530,000 in May and 14,024,000 in June, 1990.
"The number of jobs and the unemployment both go up because there are more people coming into the labor pool," Sweezey said.
Michael L. Penzer, a Bank of America senior economist, agreed.
"California is very attractive. So during a recession, you still have people coming to California looking for work, and it's just not there," Penzer said.
He added that Bank of America economists believe the recession ended in May. However, he said, most employers first react by extending workweeks and overtime for existing employees.
"Only later do they hire all the new people who have poured into the labor force," Penzer said.
The department said 582,800 of the jobless were laid off, 101,400 left their jobs voluntarily and the rest were entrants or re-entrants into the labor market.
There were 514,065 people receiving unemployment insurance benefits during a June survey week, the department said. That compared with 530,155 last month and 349,061 last year. New benefit claims totaled 74,361 in June, compared with 65,405 in May and 61,303 in June 1990.
"It's disturbing because it shows that while the rest of the economy across the nation seems to have bottomed out or even pulled up, California's is still mired in a recession," said James Lee, a spokesman for Gov. Pete Wilson.
"We are using the unemployment figures as a warning flag for the budget process, so that come Monday morning we can hit the ground running and try to get the budget passed," Lee said, referring to the legislative stalemate over the $56.4-billion spending plan.
Although the national increase in unemployment was not large, it was significant politically. While most analysts believe the national economy is beginning a recovery, the June jobless rate was the highest since October, 1986.
The White House sought to deflect criticism about the slight rise in the national unemployment rate.
Michael J. Boskin, chairman of the President's Council of Economic Advisers, told reporters that "we certainly are not satisfied" by the increase, but he insisted that despite the new figures, the recession had ended.
"We would like to see people have an understanding that this turnaround is coming," Boskin said. "We believe the recovery has begun." He predicted that the jobless rate "will begin to start back down later in the year."
Janet L. Norwood, commissioner of the Bureau of Labor Statistics, was more cautious, but also contended that the June rise did not change the consensus that the downturn has ended.