State Adds 32,800 Jobs in October; O.C. Surges

Led by brisk hiring in the Southland, California turned in another solid month of job growth in October, state officials reported Friday.

Employers in California added 32,800 nonfarm jobs last month, the bulk of them in construction and business services. That pushed down the state’s unemployment rate to 5.9%, from 6% in September, said California’s Employment Development Department.

Job formation in the state was once again strongest in Orange and Riverside-San Bernardino counties.

Orange County posted the region’s lowest jobless rate last month--2.9%, down from 3.2% in September. The county’s unemployment figures are not adjusted for seasonal factors.

Los Angeles County’s unemployment rate for October was 6.7%, compared to 6.8% in September, as it continued to generate jobs at a respectable pace.

The statewide dip came in part because of seasonal hiring as teachers who had been out of work for the summer continued pouring back into private and public school classrooms. State analysts said local education gained 5,000 jobs for the month.

On an annual basis, payrolls in Orange County were up sharply in almost all industries, especially manufacturing, retail trade and the finance sector.

Chapman University economist Esmael Adibi said the strong showing indicates that the county so far has dodged much of the impact of the Asian economic crisis, which is being felt most heavily in the northern half of the state.

But the effects of the so-called Asian economic flu are creeping south, said Adibi, who helps draft the university’s annual Orange County economic forecast that is to be unveiled early next month.

Chapman expects Orange County’s job growth to slow considerably next year, he said. “We don’t see any negative numbers, no national recession,” he said. “But the county cannot be immune from what is happening in Southeast Asia.”

Statewide, October’s payroll gains of 32,800 represented a healthy increase of 2.8% from a year ago and looked even more impressive when viewed against the more sharply slowing national economy, which added just 116,000 jobs last month. Orange County’s job tally was up 3.9% from a year earlier, to a total of just under 1.3 million. The surge in new jobs was led by the service industry, with 11,700 new positions; manufacturing, up 9,200; retail trade, up 7,800; and construction, up 5,800.

California’s economy, reflecting a younger expansion, is now marching to a faster beat than the national economy. Over the last two months, the state, which accounts for about 11% of the U.S. labor force, has generated about a quarter of the country’s new jobs.

“It’s certainly a positive report,” said Brad Williams, senior economist at the legislative analyst’s office in Sacramento. The latest report, he said, will help “allay concerns that California is going to be pulled into a recession or a serious slowdown because of the problems abroad.”

However, the overseas threat has in no way diminished. As the October jobs data showed, the Asian crisis is having an increasingly negative effect on high-tech manufacturing, the brunt of which is being borne by the Bay Area.

Last month, computer and other electronics makers cut 1,700 jobs, more than the 1,200 eliminated in September. Also, aerospace companies again chipped away at employment, reducing payrolls by another 500 last month. Layoffs in both those high-value industries have mounted in recent months, and those trends are likely to continue for some time.

Even so, total manufacturing employment in California, seasonally adjusted, actually rose by 3,800 last month, whereas factory employment nationwide fell by 52,000 in October. One big difference: California’s far-reaching construction boom.

Statewide, building contractors and other construction employers directly added 8,900 jobs in October. Total construction payrolls in the state are now up 54,000, or a whopping 9.5%, from a year ago.

Indirectly, the industry is fueling growth in construction-related manufacturing, such as furniture, lumber and stone and glass, said Ted Gibson, chief economist at the state Finance Department. California’s factory payrolls in the last two months also have been boosted by late-season hiring by food processors, said Gibson.

California’s other engine of job growth last month was the service sector, where hiring has slowed only slightly from its exceptionally brisk pace over the last couple of years.

In October, the sprawling services sector added 10,600 jobs, much of that in business services, a nebulous category that includes labor supply companies, software firms, advertising agencies. Gibson, however, said that first-quarter payroll data suggest that about half of the business services jobs growth is occurring at high-paying software and other computer services firms.

Retail trade employment, which has been growing slowly statewide this year, especially at restaurants, increased by a modest 3,700 in October. Wholesale trade, which has been stronger because it has been benefiting from the rise in imports, added 1,700 jobs last month. And the finance, insurance and real estate industry added 600 jobs, although banks are now cutting back.

Overall, said Gibson, “the state is looking very resilient.”

But within California, there are striking differences.

All nine counties of the Bay Area posted unemployment rates below 5% in October, but job growth in Northern California has slowed sharply this year because of its greater reliance on Asia and partly because of its tighter labor market and higher costs. On an annual basis, the Bay Area posted October job growth rates from 1.4% in San Jose to 2.7% in Oakland, with San Francisco in the middle.

By contrast, the jobless rates for regions in Southern California varied widely in October, from the low of 2.9% for Orange County to 6.2% for the combined Riverside-San Bernardino counties, known as the Inland Empire. However, payrolls have been increasing fastest in the vast Inland Empire, largely because of the strong home building that is taking place there.

Ben Bartolotto, research director at the Construction Industry Research Board in Burbank, said that through September, residential building permits statewide have increased 11% this year. Although activity is down in Orange and Los Angeles counties, permits pulled for Southern California were up 12%, thanks to a 30% jump in permits in Riverside County. By comparison, the Bay Area’s home building activity was down by 2% through September.

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Times staff writer John O’Dell in Orange County contributed to this report.

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Unemployment Drops

Orange County’s unemployment rate fell to 2.9% in October, the lowest rate since May.

1997

Oct. 3.2%

Nov. 2.8%

Dec. 2.6%

1998

Jan. 3.1%

Feb. 3.0%

March 2.8%

April 2.7%

May 2.7%

June 3.0%

July 3.1%

Aug. 3.1%

Sept. 3.2%

Oct. 2.9%

Source: California Employment Development Department