Employment in the motion picture and sound recording sector rose 1.7% in May but was down 4.4% from May 2007.
"There's a hesitancy at the major studios to start a big production," said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. Filmmakers are worried about a possible actors strike, he said.
Even if the economy picks up toward the end of the year, gains could be undermined by losses of state and local government jobs if Gov. Arnold Schwarzenegger and the Legislature slash spending to fill a projected $15.2-billion hole in the budget for the fiscal year that begins July 1. Cuts in state funding would dictate reductions in payrolls for counties, cities, colleges and universities, and public schools.
"We see a long period of continued sluggishness driven by the late innings of the housing slowdown, followed by Sacramento-driven government" reductions, said Ryan Ratcliff, an economist at the UCLA Anderson School of Business.
Stephen Levy, director and senior economist with the Center for the Continuing Study of the California Economy in Palo Alto, agrees that a jobs recovery is at least a year off. He called the May 6.8% unemployment figure "an eye-catcher" but cautioned that last month's sharp rise might be somewhat out of whack. The actual number of job losses were too low to justify the size of the increase, Levy said.
"I wouldn't be surprised if it got bumped down," he said, noting that economists routinely revise preliminary estimates after they've had more time to analyze data.
The employment scene, though mostly grim, is not all bad. Some industries gained in May, adding a net 9,000 jobs, including in education and health services, natural resources and mining, and information.
In Los Angeles, the leisure-and-hospitality business created 1,300 new jobs in May as the region geared up to welcome summer visitors. Although its overall unemployment rate increased, San Francisco gained 2,300 jobs at restaurants, hotels and entertainment centers.
And even heavy construction work could pick up next year as dirt begins flying on tens of billions of dollars' worth of building on roads, schools and public projects financed by voter-approved bonds.
In the meantime, out-of-work people, worried that unemployment benefits may soon run out, will probably get a little help. Congress is expected to pass legislation to extend unemployment benefits to nine months from six, and President Bush is expected to sign it, said Andrew Stettner, deputy director of the National Employment Law Project, a research and advocacy group for lower-wage workers.
But those few bright spots bring no solace to Howard Roth, chief economist at the state Finance Department.
"The jury is still out on whether housing is getting better by the end of the year. We're still going to be up to our necks in foreclosures," he said. "The economy continues to sputter along."
--
marc.lifsher@latimes.com.
