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California gains jobs, but unemployment still rises to 12.5%

More seek work amid hopes that companies are finally hiring again. Meanwhile, prospects for job growth in key industries, such as construction and manufacturing, remain weak.

November 21, 2009|By Alana Semuels
  • Job seekers line up in Pasadena in October. With so many people out of work, the thousands of new jobs aren't nearly enough to meet the demand for employment.
Job seekers line up in Pasadena in October. With so many people out of work,… (Robyn Beck / AFP/Getty Images )

California employers added workers to their payrolls in October for the first time in more than a year, but the state's unemployment rate ticked higher as more job seekers entered the labor pool amid hopes that companies are finally hiring again.

The state gained 25,700 jobs last month, marking the first time it has added workers since April 2008. Government, financial activities, education and health were among the sectors posting gains, probably with the help of the massive federal stimulus package, analysts say.

But the jobless rate continued to inch up, as the positions added couldn't keep up with the expansion of the labor force. Unemployment statewide hit a fresh post-World War II high of 12.5%, from a revised 12.3% in September, the California Employment Development Department said Friday.

Prospects for job growth in key recession-battered industries, meanwhile, remain weak.

"Job losses are moderating, but I don't think we'll see a sustained recovery in California until we begin to see job growth in construction and manufacturing," said Stephen Levy, director of the Center for Continuing Study of the California Economy.

California, which has the most manufacturing jobs in the country, lost 8,300 jobs in that sector last month and 124,400 since October 2008.

Gene Morgan is one of the casualties of the manufacturing slowdown.

The 60-year-old Stanislaus County man has been looking for a factory job since June, when his contract doing quality assurance at a medical device manufacturing company in nearby Mountain View wasn't renewed. He's willing to travel just about anywhere in the state, or endure a long commute, for a full-time job.

"Right now it seems like everybody's in 'we don't know what's going to happen' mode," he said.

Adding to his anxiety: The construction company where his wife works is teetering on the edge of bankruptcy, he said, which could mean that both will be out of work.

Good outlook for manufacturing

Nationwide, manufacturing has begun to revive slightly with the fledgling economic recovery. In the three months that ended Sept. 30, the country's gross domestic product increased for the first time in a year. The weakness of the dollar is making U.S. exports more affordable overseas -- in October, exports at the Port of Los Angeles were up, year-over-year, for the first time in 2009. And a national manufacturing index showed that economic activity in that sector expanded in October for the third consecutive month.

In California, a Chapman University survey found, purchasing managers expect manufacturing to grow in the last half of the year. The same managers had a negative outlook for the first half of 2009, said Raymond Sfeir, an economics professor at Chapman, who conducts the survey.

Computer and aerospace manufacturing should do best, Sfeir said, as companies that have been waiting to make new big-ticket purchases finally spend.

Gladstone Industries Corp. of Canoga Park, which makes decorative metalwork, has hired about 15 people in the last few months to help create ornamental metalwork and lighting for CityCenter Las Vegas, Chief Executive Vicki Atlasman said.

The company's hiring spree was a lucky break for Isidro Robles, a 23-year-old who drives about 50 miles each way from his home in La Mirada to his new job there.

"I applied 20 times or more, and the only people that responded were these guys," said Robles, who had been out of work for six months before getting the job.

As manufacturing picks up, the rest of the economy should recover too as the newly employed make purchases they'd previously delayed, said Ross DeVol, director of regional economics at the Milken Institute.

"It injects a lot more purchasing power back into the economy," he said.

A closer look at the Southland

Unemployment rates rose in most regions in the Southland in October.

Los Angeles County's rate reached 12.8%, up from a revised 12.6% in September. The rate in Orange County rose to 9.6% from a revised 9.5%, and the rate in Riverside and San Bernardino counties climbed to 14.6% from a revised 14.3%. Ventura County's rate stayed flat at 11.1%.

Nonfarm employment in Los Angeles County grew by 36,600 jobs, led by growth in the government and information sectors. The motion picture and sound recording sub-sector gained 3,000 jobs, and the trade, transportation and utilities sector gained 1,900. The number of people employed by colleges, universities and professional schools jumped 10.2% from the previous month, reflecting the traditional fall bounce as students returned to campus. It was up 5.4% from October 2008.

Orange County added 8,200 jobs in October, led by increases in professional and business services and government. The county's construction and leisure and hospitality sectors are still struggling -- they lost 1,400 and 1,200 jobs, respectively.

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