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California unemployment hits 10.1% in February

The state's unemployment rate rises from 10.1% in January and is the highest since April 1983. L.A. County's jobless rate is 11%.

March 21, 2009|Marc Lifsher

SACRAMENTO — California employers led the nation in mass layoffs in February as the state's unemployment rate hit 10.5%, the highest level since April 1983, state and federal labor agencies reported Friday.

The reductions cascaded across all areas of the Golden State's economy, hitting major corporations that included Circuit City Stores Inc., Yahoo Inc., JPMorgan Chase & Co. bank, Ralphs Grocery Co. and the Los Angeles law firm of Latham & Watkins, among others.

Big companies, which must file mandatory government reports every time they lay off at least 50 employees, gave pink slips to 45,557 Californians last month.

Nationally, mass layoff events reached a record high in February, affecting 295,477 jobs in all industries tracked by the Bureau of Labor Statistics.

The biggest portion, about a third, were in manufacturing, followed by retail trade and transportation and warehousing.

California's losses were far higher than Illinois', with 19,469 jobs lost. Pennsylvania and Wisconsin were third and fourth.

But the mass layoffs were only a modest portion of the damage done to the Golden State's economy because the bulk of jobs are at small and medium-size businesses.

In all, California lost 116,000 jobs in February, bringing the 12-month total to 605,900.

Layoffs began 18 months ago in residential construction and moved to finance and wholesale and retail trade. Now, the state numbers show that cutbacks are hitting the once-secure bastions of healthcare, education and government services, sending new waves of unemployed workers to job-hunting centers.

"The job losses are intensifying and becoming more broad-based," said Esmael Adibi, an economist at Chapman University in Orange.

Construction, which continues to weaken, suffered the most in February, shedding 30,900 jobs. All other industries reported declines, with the exception of information, which includes television and movie production.

"Even the sectors that were considered recession-proof are losing steam," Adibi said.

California's jobless rate rose four-tenths of a percentage point in February, from 10.1% in January. A year earlier the rate was 6.2%. Unemployment in Los Angeles County increased by a slightly larger margin, to 10.9% in February from a revised 10.4% in January and 6.1% a year earlier.

Last month's national rate was 8.1%.

Both federal and California laws require employers to report large layoffs, though details of the mandates differ.

The tempo of layoffs is speeding up, state government officials warn.

"Since October, we've been getting these increasingly larger losses of jobs," said Howard Roth, chief economist for the California Department of Finance. He noted that February job losses were the heaviest in a single month since at least 1990.

What's more, the pace of disappearing jobs is hitting California disproportionately hard, compared with the other 49 states. California, which accounts for 11% of the national workforce, has suffered 18% of U.S. job losses.

California in recent years has been plagued by average job growth, a reversal from the superheated dot-com boom of the late 1990s, said Stephen Levy, director and senior economist at the Center for the Continuing Study of the California Economy in Palo Alto.

Levy attributes the state's high unemployment rate to a combination of sharp job losses and a workforce that's ballooned by 350,000 people.

Growth, he said, "obviously depends on the success of national policies to boost employment and stabilize the housing and banking sectors."

That's what California Gov. Arnold Schwarzenegger, who met with President Obama on Friday at the White House, is counting on.

"My administration is working tirelessly with the federal government to pump federal economic stimulus funding into our economy to create jobs as quickly as possible," Schwarzenegger said in a statement. But, he cautioned, "the road to economic recovery will not be short."

The good economic news, meager as it might seem, is the assurance of federal aid from the Obama stimulus package and the Federal Reserve's move this week to ease credit, said Sung Won Sohn, an economist and Asian trade expert at Cal State Channel Islands.

"The federal help will not turn the economy around," he said, "but it will prevent the economy from getting worse."

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marc.lifsher@latimes.com

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