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Unemployment Rate Continues to Drop in State, L.A. Area


Unemployment fell again in California and the Los Angeles area last month, driven by the robust economy and especially growth in construction and motion-picture jobs, the state Employment Development Department reported Friday.

California's jobless rate slid to 4.8% in September from 5.1% in August. It was the lowest rate since April.

Los Angeles County unemployment dropped to 5.3% from 5.5% in August while joblessness in Orange County dipped to a seasonally unadjusted 2.5% from 2.8%.

"The California economy remains very healthy," said Lynn Reaser, chief economist for Banc of America Capital Management Inc. "The state is showing strong job growth of 3% over the past year. That's more than a full percentage point higher than the 1.9% national rate."

Construction, Reaser said, gained 8,400 jobs in September and almost 60,000 during the past year, an 8.5% annual jump.

About the only weakness, Reaser said, is in manufacturing, something California shares with other states. The state lost about 3,400 manufacturing jobs last month on a base of more than 1.9 million.

"Manufacturing jobs are seeing competition from lower-wage nations in Asia and Latin America," Reaser said. "At the same time, aircraft and defense manufacturing jobs have declined, but may have reached a low point."

Indeed, aircraft and parts manufacturing jobs declined just 0.4% statewide and in Los Angeles County last month but have fallen about 10% in California and 14% in Los Angeles over the past year.

Manufacturing also has been hurt by a slowdown in demand in the computer and semiconductor industries, Reaser said.

Motion-picture employment gained 8,600 jobs statewide in September, proving that it remains an engine of economic growth, especially in Los Angeles County, where it employs almost 160,000 people.

However, Kathleen Milnes, senior vice president of Entertainment Industry Development Corp. in Los Angeles, said the news is less rosy than it appears.

Milnes said she suspects much of the sector's gain comes from the studios rushing films into production this year because they are worried about potential strikes by the Writers Guild of America and the Screen Actors Guild when contracts expire next year.

"People want to have product in the pipeline to distribute," she said.

Moreover, the way the state tallies job numbers--by surveying employers and asking how many people are on their payrolls--obscures the damage being done to the Southern California economy by the ongoing strike among Screen Actors Guild members who work in commercials.

Milnes estimates that represents about $2 million per workday in lost economic activity.

But because many of the workers involved in the production of commercials are freelancers, the loss of their jobs to the strike doesn't show up in the state's payroll data, Milnes said.

Nonetheless, the state gained 23,000 payroll jobs last month, bringing the total to just shy of 15 million, a record high for the 20th consecutive month.

"I think the real story of this economy is job growth," said EDD director Michael S. Bernick. "We have had steady job growth of 20,000 a month for a while now and this is virtually all private-sector growth. Government has been losing jobs."

Though it has declined steadily, California's jobless rate is still well above the national average of 3.9%. Reaser said that she believes the national rate won't dip much lower and that the disparity between California and the rest of the nation might work to the Golden State's advantage.

"There still are employees to hire in California. That might be attractive to companies elsewhere," Reaser said.

But she expects the gap to close as the California economy continues to expand.

San Diego County's jobless rate fell to 3.0% from 3.4%. The rate for Riverside and San Bernardino counties dipped to 5.4% from 6.0%. And the rate in Ventura County dropped to 5.3% from 5.8%. As with all county figures, except Los Angeles, these are seasonally unadjusted.

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