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Calif. Job Market Remains Shaky

Payrolls shrink by 13,100 in April. The jobless rate holds steady at 6.7%, but analysts say it is understated.

May 10, 2003|Marla Dickerson | Times Staff Writer

California's job market slumped in April as employers concerned about sluggish sales and an uncertain recovery slashed 13,100 jobs, according to figures released Friday by the state Employment Development Department.

It was the third straight month that nonfarm payrolls have fallen in California, with job cuts coming across a host of industries, including manufacturing, trade, construction and business services.

The state's unemployment rate held steady at 6.7%, where it has been for the last three months. But analysts said that figure probably was understated. The state's labor force shrank in April -- a sign that more unemployed Californians have become discouraged and stopped looking for work and are thus no longer counted in jobless statistics.

Los Angeles County's unemployment rate dipped to 6.5% in April from 6.6% in March, reflecting the somewhat brighter economic picture in Southern California.

April is typically a month that brings employment gains, spurred by a flurry of tax preparation work and warmer weather that aids spring travel, seasonal clothing sales and construction.

But experts say businesses simply weren't in the mood to do much hiring last month, with the dust barely settled in Iraq and the national and state economies still struggling.

"They aren't looking to spend money if they don't have to," said Nancy Sidhu, senior economist with the Los Angeles County Economic Development Corp. "They aren't buying new equipment, and they are looking six ways from Sunday not to hire new people. That's what we are seeing here."

In the last three months, California has shed 31,200 jobs, or 0.2% of its nonfarm payroll employment.

That was better than the nation, which lost 0.4% of its nonfarm jobs in the same period and saw the April jobless rate rise to 6% from 5.8% in March.

Still, weakness abounds in California's labor market as the most recent data show:

* Californians are staying unemployed longer: In April, 22.4% of jobless residents had been out of work at least six months, compared with 14.6% a year earlier.

* The unemployment rate for nonwhites hit a seven-year high of 9.2% last month, and the jobless figure for teens reached 19.3%, the highest since 1998.

* Average weekly work hours in manufacturing slid in April to 39.4 from 39.6 in March.

Four of 11 industries tracked by the state employment agency -- education and health services, financial activities, government and other services -- posted gains in April.

All others recorded losses, led by the trade, transportation and utilities sectors, which declined by 8,200 jobs mainly because of weakness in retail hiring.

Manufacturing continued its long slide, losing 5,200 jobs in April. The state's information sector, which includes motion pictures and Internet service providers, was down 200 jobs. Over the last year, employment in this high-paying category has declined by 34,100.

Among geographic regions, the Bay Area remained California's weakest link. Santa Clara County, home to San Jose and the center of Silicon Valley, lost 900 jobs last month, on a seasonally unadjusted basis. The county has shed 193,300 jobs, or 18.1% of its nonfarm payroll positions, since employment peaked in December 2000.

Santa Clara's April unemployment rate of 8.3% was down from 8.5% in March and well off the peak of 8.9% reached in October. But analysts said that's largely because so many discouraged workers have moved out of the county or dropped out of the labor force, which has declined by nearly 10% over the last 2 1/2 years.

"In San Jose, you've still got a high unemployment rate and declining labor force," said Tom Lieser, senior economist with the UCLA Anderson Forecast. "It's not good."

In contrast, Lieser noted, Southern California continues to perform relatively well.

The five-county region generated 9,700 jobs in April, although that was not seasonally adjusted. The gains were led by the Inland Empire, which contributed 5,600 jobs; in Los Angeles County, 3,500 jobs were added over the month.

The April jobless rate in Orange County ebbed to 3.8% from 3.9% the previous month. Riverside County's rate declined to 5.7% from 5.8%. San Bernardino held steady at 5.6%, and Ventura County saw its rate decline to 4.8% from 5%.

San Luis Obispo County posted the lowest unemployment rate of all California counties in April, at 3.3%, and Imperial County experienced the highest at 18.1%.

Unlike the jobless rates for California and Los Angeles County, the figures for all the other areas are not adjusted for seasonal variations.

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