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California Adds 30,500 Jobs in Sept.

Economy: Unemployment rate edges down to 7%. Los Angeles County rate falls too, to 7.5%.


Defying a surprise downturn in employment nationally last month, the rebounding California economy added an ample 30,500 jobs in September, government officials reported Friday.

The job gain helped nudge the state's unemployment rate down to 7% from a revised 7.1% in August. September marks the sixth consecutive month that California has hit or maintained its lowest unemployment rates in more than five years.

"The economy seems to be very much on track," said Jay Kloepfer, a regional economist with the DRI/McGraw-Hill consulting firm.

For months, much of the state's upturn has been led by "the things that California does well--high-tech manufacturing and high-tech services and the entertainment industry," noted Ted Gibson, economist for the State Department of Finance.

While those areas continued to show strength, another important ingredient last month was growth in public education employment, particularly in Southern California. That largely reflected teacher hiring by school districts tapping new state funds to reduce class sizes for 1st-, 2nd- and 3rd-graders.

Los Angeles County, one of the state's economic weak spots since the early 1990s, saw its jobless level fall to 7.5%. That was down from a revised 7.8% in August and the lowest mark since May 1995, when the rate was 7.4%.

Orange County, one of the state's economic stars, posted a jobless rate of 4.1%, down from 4.3% in August. It was the best figure for the area since December 1990, when joblessness also was 4.1%.

(Orange County's jobless rate, unlike the state and Los Angeles County figures, is not adjusted for seasonal trends.)

"In the earlier stages of the recovery, it was true that Southern California was lagging the north, but that's not the story anymore," said David Hensley, regional economist with Salomon Bros.

In fact, Hensley said, long-struggling Los Angeles County and some other lagging areas in Southern California offer more potential for growth than Silicon Valley, where real estate and labor costs have been relatively high amid a technology-driven boom.

Still, Kloepfer noted that in the semiconductor industry and related high-tech fields, "there's certainly anecdotal evidence that things are slowing down, but we haven't seen it show up in these numbers yet."

The latest state statistics still leave California with far higher joblessness than the nation.

The U.S. jobless rate, reported two weeks ago, edged up to 5.2% in September from 5.1% in August, as employers pared 40,000 jobs from their payrolls. It was the first job decline in eight months in a generally vigorous U.S. labor market.

But California's growth this year has substantially outpaced the nation's. "The U.S. has run into limits because there are so few able-bodied people still unemployed, and California hasn't run into anything near that," Hensley said.

The only downbeat note that Hensley sounded for California was his assessment that the state's recovery is unlikely to speed up further. He said a broader expansion is being thwarted by the continuing slump in home building and the weakness of the economies of such key foreign trading partners as Japan and Mexico.

"Trade and housing are aces in the hole for the future, but until they come into line, I think that California is looking at a ceiling in its growth rate," Hensley said.

Over the last 12 months, California has gained an average of 24,025 jobs a month, slightly ahead of the pace of last year and just behind the 24,175 monthly average of vibrant 1989, the year before the recession struck.

In September, most of the state's new jobs came in the broad category of services, which posted an employment gain of 13,000. Within that field, most of the increase was in private schools and business services, which includes software developers and consultants.

The next-biggest gainer was construction, with an increase of 7,600. Although home building is weak, commercial and industrial construction has climbed.

Other big gainers were retailing, up 4,600, and government, which rose 4,200, largely on the strength of the schoolteacher hiring.

The biggest decline came in manufacturing, which was off 1,200, but that was largely attributed to temporary weather-related declines in food processing.

In fact, the aerospace industry--whose severe downturn dragged the state into its recession of the early 1990s--and the rest of the durable manufacturing sector were up slightly.

In Southern California, the jobless rates dropped in every county but Ventura, where the level held even at 8.2%.

Among the region's other counties, the jobless rates--none of which was adjusted for seasonal trends--were: San Diego County, 5.3% in September, down from 5.5% in August; Riverside, 9%, down from 9.3%; and San Bernardino, 7.1%, down from 7.4%.


California Jobless

State unemployment rate, seasonally adjusted:

(please see newspaper for full graph)

September 1996: 7.0%

Source: Labor Department

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