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State's Jobless Rate Unchanged at 6.4%

October data show the unemployment figure holding steady for a fourth month. Labor force is growing faster than the number of jobs.

November 09, 2002|Marla Dickerson | Times Staff Writer

California's labor markets continued to tread water in October.

The state's unemployment rate held steady at 6.4%, where it has been for four months, according to a report released Friday by the Employment Development Department.

A separate survey of employers showed that the state added nearly 20,000 jobs in October. That outpaced the nation, which saw payrolls decline by 5,000 jobs last month. But California's employment gains weren't enough to make a dent in the state's jobless rate because the labor force is growing faster than employers are adding positions.

Though analysts welcomed signs of employment growth, they expressed caution about reading too much into one month's data. Seasonal factors accounted for much of the gain, with government -- mainly public schools -- accounting for four of five jobs added.

Experts said California can't count on the public sector to be its engine of job growth given the budget woes roiling federal, state and local coffers. Bedrock industries such as manufacturing and high tech continued to shed jobs last month, and employers in other industries remained reluctant to do much hiring.

"We all know that the public sector is going to be financially strapped over the next year," said UCLA economist Tom Lieser. "We need to see more of an indication that the private sector is coming back."

Indeed, signs of a weak labor market abound:

* California has 23,100 fewer jobs than it did in October 2001, when its unemployment rate was 5.9%.

* More than 1.1 million state residents are unemployed, and they are remaining jobless longer. In October, 18.5% of unemployed Californians had been jobless 27 weeks or longer -- a four-year high.

* October marked the third straight month that unemployment for nonwhites in California was at 8.5%, the highest it has been since 1996.

* Average weekly hours in manufacturing fell to 40.6 in October from 40.9 in September, as did overtime hours and earnings.

Chapman University economist Esmael Adibi said war jitters, sliding consumer confidence and poor corporate earnings have spooked employers, who aren't likely to boost their payrolls substantially amid so much uncertainty.

"Everyone is in a wait-and-see mode," Adibi said. "There isn't enough energy in the economy to create jobs any faster."

Still, there was some good news to be gleaned from October's employment report. Six of the eight major sectors tracked by the EDD gained jobs during the month.

Government led the way, with an increase of 15,700 jobs. The wholesale and retail trades added 6,400 positions. Finance, insurance and real estate gained 2,800. Transportation and public utilities increased by 2,200 jobs, and mining added 100 jobs.

The giant services sector added a net 5,500 jobs, led by gains in health services, social services and motion pictures. However, business services, which include high-paying technology jobs, shed 3,800 positions over the month.

The manufacturing sector slashed 8,100 jobs in October, with those losses split almost evenly between makers of durable goods and makers of nondurable goods. The beleaguered sector has shed jobs in 20 of the last 21 months.

The construction sector also lost jobs, dropping 4,800 positions in October.

Southern California remains the state's job engine. Last month, the region added 25,400 nonfarm payroll jobs, led by Los Angeles County, which gained 14,000 jobs, most of them in the public schools. Despite a slow economy, Southern California has 17,700 more payroll jobs than it did in October 2001. In contrast, the Bay Area has lost 67,600 jobs over the same period.

Los Angeles County's unemployment rate fell to 6.1% in October from a revised 6.5% in September. Orange County's rate declined to 4% last month from 4.1% in September. Riverside County's jobless rate fell to 6.5% in October from 6.6% the previous month. San Bernardino County's rate held steady at 5.6%, as did San Diego County's at 4.2%. Ventura County's jobless rate declined to 5.4% in October from 5.8% in September.

Among California counties, San Luis Obispo posted the lowest October unemployment rate at 3.3%, and Imperial posted the highest at 21.9%.

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