And the situation is unlikely to improve any time soon, economists said. The near-collapse of the housing, mortgage and residential construction industries is contaminating the rest of the Southern California economy, said Eduardo Martinez, an economist with the Los Angeles County Economic Development Corp.
Economic weakness has spread to commercial construction, retail trade and activity in the enormous ports of Los Angeles and Long Beach, where incoming container traffic has declined for the last 13 months, he said.
The prospect of finding the bottom of the crippled housing market is getting closer, "but it's still unknown how long it will take to get there," Martinez said. He expects the California economy to begin turning around in 2009, but exactly when is anyone's guess.
With Southern California plagued with half-built houses, abandoned subdivisions and foreclosed existing homes, unemployment continues to climb, exceeding statewide levels in most parts of the region. It reached 7.9% in the Los Angeles metropolitan area, up from a revised 7.5% in July and 5% in August 2007.
The Inland Empire was hit even harder, with joblessness at 9.2% in August compared with a revised 9% in July and 6.4% in August 2007. Only Orange County fared relatively better, posting unemployment of 5.8% in August, just slightly more than July's 5.7% but well above 4.2% a year ago.
The August unemployment figures, though stark, do not reflect any local effects from the international credit crunch or a series of hurricanes that swept the Southeast, the U.S. Bureau of Labor Statistics cautioned.
The worsening state employment picture is sure to increase calls by Gov. Arnold Schwarzenegger and others for Congress to pass legislation in the next few weeks giving unemployed workers who have exhausted their benefits an additional 13 weeks of emergency relief.
The governor, in a letter this week to congressional leaders, warned that the percentage of unemployed people running out of benefits of up to $450 a week "is already higher than at the beginning of the 2001 and 1990-91 recessions."
By the end of this year, an estimated 200,000 Californians could run out of unemployment benefits if Congress doesn't act before recessing in October, said Maurice Emsellem, policy director of the National Employment Law Project, which advocates for the rights of low-wage workers.
"The economy is crashing," he said. "Congress and the president need to do something for unemployed families."
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marc.lifsher@latimes.com
