Jobless Rate in O.C. Hits 2.4%, a 20-Year Low

Even as California’s job growth slowed sharply in December, Orange County’s unemployment rate fell further last month to 2.4%, matching at least a 20-year low, state officials reported Friday.

The report from the Employment Development Department showed there were 1.39 million people in Orange County working last month. Based on the state’s household survey, the ranks of unemployed people actively seeking work in the county dropped to 34,400, about 4,000 fewer than November, when the jobless rate was revised to 2.7%.

Although the county’s jobless figure is not adjusted for Christmas hiring and other seasonal factors, the unusually low unemployment rate--also matched at year-end in 1988 and 1989--reflects the continued job creation in the county in the face of increased layoffs and the delayed effects from global turmoil and weakened demand for California goods.

“Overall, we are doing about as well in terms of job creation in a healthy, growing economy as we can,” said Anil Puri, director of the Institute for Economic and Environmental Studies at Cal-State Fullerton.

Even so, the state’s separate survey of payroll employers in December suggested that job growth is slowing in Orange County and elsewhere in the state.

Based on seasonally adjusted figures, state officials said California employers added a measly 4,400 new nonfarm jobs in December and the jobless rate edged up at the end of the year.

December’s surprisingly skimpy job gains were in sharp contrast to the whopping 378,000 new jobs that nonfarm payrolls produced nationwide last month. Unemployment in the state inched up to 5.9%, from a revised 5.8% in November, although the U.S. unemployment rate dipped last month to 4.3%, matching a 28-year low also set in April. The state and U.S. figures are seasonally adjusted.

Friday’s California report, however, showed that job growth in November was much stronger than previously estimated, and that statistical adjustment by the state’s Employment Development Department probably exaggerated the weakness in December. The unusual cold spell in December also may have held back construction payrolls in California, even as unseasonably warm weather in the Midwest and East inflated employment there last month.

State and county monthly payroll numbers are based on a relatively small sample of employers and can be volatile, depending on the survey period and other statistical quirks. Last July, California employers added just 3,700 jobs, triggering concerns, but that was followed by a burst of hiring in ensuing months.

There is less likelihood of that happening this time, however. With recessions in Asia buffeting high-tech manufacturers and the unsettling conditions in Latin America, analysts said the latest report for California may portend the economic slowdown widely expected in the months ahead. Asia’s troubles have already weakened the state’s exports and led to a sharp deceleration in the San Jose area.

Southern California’s more diversified economy has held up better, and that trend continued in December.

Although county payroll job tallies are not seasonally adjusted on a monthly basis, Orange County’s nonfarm employment performance over the month can be seen in the 3.3% increase from a year earlier. That compared with annual growth rates of 2.3% for Los Angeles County and 2.6% for all of California in December.

Sizzling Early Pace Fueled ’98 Gains

The pace of job gains in Orange County has slowed from early last year when employers were adding workers at an annual rate of more than 4%. And that earlier sizzling pace led to another stellar year of job growth for the county.

Based on an average of 12 months, nonfarm employers in Orange County created nearly 50,000 new net jobs last year, growing at an overall rate of 4.1%--compared with 3.2% for the state. In Orange County, manufacturing added 10,400 jobs; construction, 6,000; wholesale and retail trade, 11,500; finance, insurance and real estate, 3,500; and the sprawling services sector added nearly 12,000, about half of them in computer and other business services.

For all of last year, Orange County’s jobless rate averaged 2.9%, down from 3.3% in 1997.

Los Angeles County, where 29% of the state’s payroll workers are employed, added more than 101,000 jobs for all of last year--about a quarter of the state’s new jobs. For the county, that was a growth rate of 2.6%, smaller than the statewide average but still solid.

In December, Los Angeles County’s nonfarm payrolls totaled 4.05 million--the highest this year and more than 300,000 jobs higher than December 1993, the year-end low point this decade. Still, as of last month the county remained about 140,000 jobs shy of the peak year-end employment in December 1989. The county’s unemployment rate last month stood at 6.7%, up slightly from December 1997.

Statewide, job growth for all of last year exceeded many people’s expectations. Assuming that December’s figures hold up, nonfarm payrolls last year grew by more than 418,500 from 1997, based on monthly averages. That was a growth rate of 3.2%, just a bit lower than the 3.3% increase for all of 1997, when the state churned out 424,000 jobs. By comparison, the nationwide job growth rate for all of last year was reported at 2.3%.

The industries that propelled California’s expansion last year were construction, which added nearly 51,000 jobs, a gain of more than 9%; and business services--a group that includes employment agencies and computer software and services, which overall boosted payrolls by more than 81,000, or 8%.

California’s employment in wholesale and retail trade last year advanced by 2.4%, or about 72,000 new jobs; and the number of employees in finance, insurance and real estate rose by 3.4%, or 25,300.

Manufacturing employment, meanwhile, wound up with growth of 1.5%, or 28,300 jobs, after expanding at more than double that pace in the previous year. That was still better than the nation, which shed a total of 269,000 factory jobs last year.

The slowdown in manufacturing and some other industries is expected to cut the state’s overall job growth this year to a more modest rate of about 2%.

Sung Won Sohn, an economist for Wells Fargo Bank, said Friday that California’s small job growth in December was probably a reflection of the delayed effects of the Asian crisis on manufacturing, which in turn is starting to weaken the service industries.

“Asia has not disappeared, and it is working its way through California’s economy,” said Sohn. He pointed, however, to the divergent picture between Northern and Southern California that was evident in the state’s report Friday.

In December, job growth in Santa Clara County, home to Silicon Valley, fell to an anemic level of less than 1% on an annual basis, even though the unemployment rate there fell to 3% last month. Nonfarm employment in San Francisco County was up less than 2% in December.

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Employment Aplenty

Orange County’s jobless rate moved down to 2.4% in December from 2.6% a year ago, reflecting hiring by retailers for the holiday season. Monthly unemployment rates:

1997

Dec. 2.6%

1998

Jan: 3.1%

Feb: 3.0%

Mar: 2.8%

Apr: 2.7%

May: 2.7%

June: 3.0%

July: 3.1%

Aug: 3.1%

Sept: 3.2%

Oct: 3.0%

Nov: 2.7%

Dec: 2.4%

Source: California Employment Development Dept.