Jobs outlook weak as state's unemployment rate hits 6.9% in June
Small rise from May brings the gauge to a nearly five-year high. The Los Angeles area has suffered substantial losses since a year earlier.
SACRAMENTO — California's jobless rate crept ahead Friday as experts saw weakness spreading into new areas of the economy.
For months, job losses were concentrated in the state's housing industry. But with June's increase of one-tenth of a percentage point to 6.9%, it was evident that a broader downturn is underway.
In all, the state lost 12,800 jobs in June compared with May. The number of government workers fell 6%, while professional and business positions declined 5.2%, manufacturing 4.4% and the information sector, which includes television and film production, 2.6%. Retail trade dropped 2.5%, according to an analysis of state figures by Beacon Economics, a Los Angeles consulting firm.
California jobless rate: An article in Saturday's Section A about California's June unemployment statistics used percentages in quantifying job losses of varying types. The statistics should have been rendered in terms of thousands of jobs lost. Therefore, the number of government workers fell by 6,000, not 6%; professional and business positions declined by 5,200, not 5.2%; manufacturing jobs fell by 4,400, not 4.4%; and the information sector declined by 2,600 jobs, not 2.6%. Retail trade positions dropped by 2,500, not 2.5%.
California jobless rate: An article in Saturday's Section A about California's June unemployment used percentages to quantify the kinds of jobs lost. As a correction published Sunday said, the statistics should have been expressed in terms of thousands of jobs lost. The Sunday correction included corrections in five categories but failed to include one statistic from the article: The article cited a 2.1% drop in construction jobs in June compared with May; it should have listed that June decline as a loss of 2,100 jobs. The other correct figures are: the number of government workers fell by 6,000; professional and business positions declined by 5,200; manufacturing jobs fell by 4,400; the information sector declined by 2,600 jobs; and retail trade positions dropped by 2,500.
Construction, which led the decline in previous months, dropped 2.1% in June.
"The June data give the first indication that job losses are now more and more being caused by consumers slowing down their spending and not just the sharp housing losses," said Stephen Levy, director and senior economist at the Center for the Continuing Study of the California Economy in Palo Alto.
The weakness is likely to be exacerbated by high energy prices cutting into people's buying power, economists predict.
They point to reports of corporate layoffs that have been vying with the presidential campaign for public attention this summer. Late last month, Bank of America Corp. said it would slash 7,500 jobs over two years as the result of its acquisition of Calabasas-based Countrywide Financial Corp.
This month, Starbucks Corp. said it planned to close 88 California outlets, employing more than 1,500 baristas. Century City-based Northrop Grumman Corp. halted plans to hire 750 engineers after the Pentagon decided to rebid a $35-billion air tanker contract it had won earlier. Tribune Co. of Chicago is in the process of laying off 250 workers at its flagship newspaper, the Los Angeles Times.
The cavalcade of grim news is prompting John Menou, an unemployed Corona bricklayer, to hunker down for the hard times. "I'm gearing up for the worst," he said.
"We're tightening the screws in terms of buying things," said the married father of three boys, ages 6 to 12.
Menou, 45, has been out of work for six weeks, about three times longer than he usually spends between jobs at large commercial, industrial or government construction sites in Southern California.
"We're going to go through another heavy-duty recession like in 1992," he said.
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