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State jobless rate hits 8.4%

The figure, a 14-year high, puts California behind only Michigan and Rhode Island. L.A. County's rate is 8.9%.

December 20, 2008|Marc Lifsher and Mark Medina

SACRAMENTO AND LOS ANGELES — A loss of nearly 42,000 jobs last month pushed California's unemployment rate to 8.4%, a 14-year high and the third-highest jobless rate in the country.

California's November unemployment figure lagged behind only Michigan with its crippled automobile industry at 9.6% and Rhode Island at 9.3% after job cuts this year in retail, manufacturing and services.

Nationally, unemployment hit 6.7% in November. In Los Angeles County, it rose to 8.9% in November from 8.3% in October.

The state's jobless rate was up from 8.2% in October, the Employment Development Department reported Friday.

And economists say the grim news isn't over.

"I don't at the moment see any kind of turnaround," said John Husing, a Redlands private economist who focuses on Southern California and its international ports. "My instinct is 2010. I think 2009 is going to be the worst year we've seen in many moons."

For Jean Battalia, 29, an out-of-work substance-abuse clinic director from Long Beach, 2008 is plenty bad enough.

"I don't have groceries. I'm not getting a Christmas tree," she said. Battalia lost her job in May and is about to exhaust her initial unemployment benefits. She's hoping for an extension and spends part of every day using free library computers to get e-mail and send out resumes.

"I'm feeling more and more hopeless," she said. "I'm not trying to wallow in self-pity, but positivity can only go so far."

Finding work doesn't look as if it's going to get any easier in the months ahead as seasonal sales wind down and some stores reduce operations or go out of business. Large employers have filed legal notices with the state that they intend to cut about 9,000 jobs, with big hits expected at airlines, high-tech companies, food processors and manufacturers.

Even once-strong hiring in healthcare and government is showing signs of weakening next year. A projected $41.2-billion state budget deficit could lead to involuntary furloughs and wholesale firings of workers at state and local government agencies, school districts, community colleges and public universities. For now, one of the economy's only real bright spots is in motion picture and sound recording, which gained 3,900 jobs in November as studios geared up production for 2009 and 2010.

In November, the economy contracted across a broad range of industries. Layoffs compounded ongoing misery in construction and financial services -- spurred by the year-old housing crisis -- and brought new woes to manufacturing, international trade and transportation and retail sales.

In all, the recession gripping the Golden State's economy for the last year has claimed 136,000 jobs out of a total payroll of about 15 million people. A year ago, state unemployment stood at 5.7%.

Retail store managers, who forecast lackluster holiday sales months ago, cut back staffing, accounting for more than half the November contraction in employment. And December and January are shaping up as even worse as some big department stores and chains go out of business.

"After the toys are gone, we're done," said Jorge Bonilla, a cashier at a KB Toys at the Glendale Galleria. KB Toys Inc. is liquidating inventory as part of a bankruptcy filing last week. Co-worker Anthony Lewis said he expected "to be stressing soon, if I don't get any job opportunities."

Finding that new position could be a challenge because California's real unemployment picture is darker than the state's 8.4% unemployment rate indicates, economists caution.

"People believe there are no jobs to be had, and they are simply dropping out of the labor force and don't get counted," said economist Sung Won Sohn of Cal State Channel Islands.

California's real or "effective" unemployment rate is probably twice the official number, Sohn said, meaning "the pain in the marketplace is much greater than 8.4% would show."

When an eventual upturn in hiring might come will depend "on the success of federal recovery programs underway and the magnitude and success of the economic stimulus package to be unveiled soon by the Obama administration," said Stephen Levy, chief economist and executive director of the Center for the Continuing Study of the California Economy in Palo Alto.

The stimulus package is expected to provide hundreds of billions of dollars for job-rich public works projects and, possibly, direct grants to state and local governments. It should start showing up in economic statistics by the second half of 2009, said Esmael Adibi, an economist at Chapman University in Orange. But the spending may not translate into large-scale job creation until 2010, he said.

In the meantime, fearful employers could shy away from increasing payrolls and may even "lay off more people than they need to," Adibi said.

Tito Ayala, an unemployed truck driver from Anaheim, is used to such skittish employers.

"I've been putting a few applications out, but the times are bad," said Ayala, 46, who lost his job with FedEx Freight in May. "They're laying people off."

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marc.lifsher@latimes.com

mark.medina@latimes.com

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