Advertisement
YOU ARE HERE: LAT HomeCollectionsBusiness

April job losses end state's eight months of gains

Jobless rate falls as discouraged workers leave the labor force. Economists are disappointed by results amid a worsening state budget deficit, but cite long-term improvements.

May 18, 2012|By Ricardo Lopez, Los Angeles Times
  • People stand in line at the 2012 Southeast L.A. Hiring Spree in April. Some of those who are discouraged by their job prospects have gone into business for themselves.
People stand in line at the 2012 Southeast L.A. Hiring Spree in April. Some… (Francine Orr, Los Angeles…)

California's labor market stumbled in April as employers in a wide swath of industries trimmed their payrolls, shaking the state's long-sputtering economy.

Employers shed 4,200 jobs last month from such diverse industries as construction and hospitality, ending eight months of employment gains, according to figures released Friday from the state's Employment Development Department.

The unemployment rate, however, dipped last month to 10.9% from 11% in March, the result of discouraged workers leaving the labor force, according to the department.

Economists were disheartened by the jobless numbers, especially because the state is already bedeviled by a $15.7-billion budget hole that could lead to more government and school layoffs this fall.

"The loss [of jobs] this month is clearly a disappointment," said Esmael Adibi, director of Chapman University's A. Gary Anderson Center for Economic Research. "The economy still has a long way to go to bring unemployment down in a significant way."

Even if the state continued to add jobs in coming months, he said, it wouldn't be enough to "make a significant dent in the unemployment rate."

But economists weren't overly pessimistic, either.

"The picture is that California's economy is slowly improving," said Sung Won Sohn, an economics professor at Cal State Channel Islands. "If you look at employment gains over a longer period, over the last year, it's clearly improved."

Indeed, the state has gained 175,600 jobs over the last year, through April, and the unemployment rate has fallen from 11.8% a year earlier.

Some of those discouraged by their job prospects have gone into business for themselves, slightly expanding the civilian employment population, Adibi said.

Michael Treidl, 30, who studied physics at Carnegie Mellon University, has been trying to get a job in finance for several months. But while he looks, he runs his own tutoring company, LA Tutors 123, to stay afloat.

"I never set out to be a serial entrepreneur," the Los Angeles resident said. "I fell into it because of the recession. I'm still looking for work in the financial sector and remain optimistic."

California's unemployment rate remains well above the national rate, which was 8.1% in April. Only two states have higher jobless rates: Nevada at 11.7% and Rhode Island at 11.2%.

Nationally, the West Coast recorded the highest regional unemployment rate at 9.5%. The Midwest had the lowest jobless rate, at 7.2% last month.

California lost 23,300 jobs across seven sectors; construction was down 6,700, manufacturing fell 4,100, education lost 3,600, and leisure and hospitality dropped 3,500.

There were some bright spots in the April figures for California.

The professional and business services sector, which includes well-paid positions in accounting, law and engineering, saw the largest gain with 12,700 jobs. Among the remaining three gainers was the trade, transportation and utilities sector with 5,500 jobs.

Mark Howard, managing director of Management Recruiters of Berkeley, said his office has been busy in recent months placing job candidates in the healthcare and the finance industries.

Over the next few months, he predicted, hiring will be "steady but slow" as companies move to fill vacant positions — not, however, to expand.

Economists such as Sohn said they expected California's job market to strengthen going into the summer months, barring any other economic disruptions. Housing prices, he said, seemed to be leveling off and the housing market is expected to strengthen later this year.

"I think the economy is moving in the right direction," he said. April's numbers "don't really indicate that economic growth has stalled or is being derailed."

But Sohn warned that the state's budget situation was not improving, "it's deteriorating." He said California should expect additional layoffs if voters don't approve a tax increase on the November ballot.

In Los Angeles County, the unemployment rate fell to 11.6% from 11.8% in March. In the Inland Empire, the rate fell to 11.7% from 12.7% in March, largely because more workers there left the labor force. Orange County added 3,300 jobs in April, reducing the unemployment rate there to 7.4%, down from a revised 8.2% in March.

Dennis Meyers, principal economist for the state's Department of Finance, called April's numbers a slight setback. Still, he said: "Nothing indicates that we've turned any kind of corner."

ricardo.lopez2@latimes.com

Advertisement
Los Angeles Times Articles
|
|
|