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State Jobless Rate Remains Unchanged at 6.6%

Payrolls dip in February, but the drop is less than expected. L.A. County adds 2,700 positions. Figures may signal a rebound in Southland.

March 22, 2003|Jerry Hirsch | Times Staff Writer

California's jobless rate held steady at 6.6% last month, and there were encouraging signs that Southern California is stirring from a recession, according to employment data released by the state Employment Development Department on Friday.

The department also said the state lost 15,100 nonfarm payroll jobs in February, a dip far more mild than what many economists who follow the region expected. The two indicators are based on different studies; the unemployment rate is calculated from a survey of households, and payroll figures are derived from a survey of companies.

"I was figuring that the state was going to lose 30,000 jobs or more, just based on its share of the nation's workforce," UCLA economist Tom Lieser said. The United States as a whole lost 308,000 jobs in February, leaving it with an unemployment rate of 5.8%.

"You would expect February to be a bad month for job losses. We had the gasoline price shock, the uncertainty in the financial markets," Lieser added. "But now, maybe the worst of the first quarter is behind us."

For The Record
Los Angeles Times Wednesday March 26, 2003 Home Edition Main News Part A Page 2 National Desk 3 inches; 96 words Type of Material: Correction
Jobless report -- An article about California employment in Saturday's Business section implied that Southern California is in a recession. Although job growth has remained sluggish, most economists do not consider the region to be in a recession, which is generally understood to mean at least six months of declining economic activity or employment. In addition, the article should have noted that the jobless rates and monthly payroll changes reported for Los Angeles and Orange counties were not seasonally adjusted and as such not comparable with the statewide figures, which were modified to reflect seasonal variations.

Indeed, the numbers in Los Angeles and Orange counties were downright encouraging, said Lisa Grobar, a regional economist with Cal State Long Beach.

"It really looks like L.A. County's economy is stabilizing, and in Orange County, the rate of job growth is picking up a bit," Grobar said.

The Los Angeles County jobless rate dipped to 6.5% in February from a revised 6.8% the previous month, the state said. The county gained 2,700 jobs and now has about 4 million jobs, a decline of 0.2% from February 2002.

"That is really good news considering that Los Angeles is where the bulk of the state's jobs are," she said. The region accounts for almost one of every three jobs in California.

Orange County gained 3,600 jobs in February, up about a third of a percent from the previous month. Its unemployment rate stood at 3.9% last month, down from 4% in January. Only Marin and San Luis Obispo counties have lower jobless rates.

Grobar figures that the rate of job growth in Orange County has nearly doubled to 0.7% in the first two months of this year compared with the fourth quarter of last year.

"If you look at Southern California as a region and compare it to what was happening last year, manufacturing is still awful, but construction is growing and I am encouraged by the growth we are seeing in retailing," Grobar said.

One reason is the opening of 28 Kohl's department stores in Southern California this month.

The "stores created approximately 4,200 jobs. And nearly all of those associates were on our payroll in February," said Tawn Earnest, spokeswoman for the Menomonee Falls, Wis., chain.

Orange County has gained 5,000 retail jobs since February 2002, a 3.4% growth rate. And in the same period, Los Angeles County has generated 6,900 jobs, a 1.8% growth.

This trend is not shared across California. "We continue to see a sharp split between the urban economies of Southern California, where unemployment remains relatively low, and the Bay Area, where the continued slowdown in technology means continued higher unemployment," said Michael Bernick, director of the Employment Development Department.

At 8.5%, the jobless rate in Santa Clara County is almost 2 percentage points higher than in Los Angeles and is more than double Orange County's rate.

Tech industry layoffs continue at an unprecedented pace. On Thursday, Milpitas-based electronics manufacturer Solectron Corp. said it would lay off 12,000, or 1 in 6 of its workers, though it is unclear how many of those jobs would be in California.

This week, Applied Materials Inc., a Silicon Valley manufacturer of semiconductor equipment, said it planned to lay off 2,000 employees, or 14% of its workforce. And Monday, Poway-based computer maker Gateway Inc. said it was firing 1,900 workers, a 17% cutback.

The state's job losses last month partially offset an employment gain of 28,400 in January. California has now lost 247,100 jobs, or 1.7% of its employment, since the recession began in March 2001, according to the employment department.

The industries with the biggest gain in February were financial services, with 3,300 positions added; health and educational services, also 3,300 jobs; and construction, 2,600 jobs.

Transportation and utilities sectors shed 8,600 positions last month, and professional and business services lost 5,600, the state said.

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