State's jobless rate tops 6 percent
Governor speeds up planned construction to provide work
By Dean Calbreath
UNION-TRIBUNE STAFF WRITER
January 19, 2008
Despite relatively strong job growth, the unemployment rate in California jumped above 6 percent last month, prompting Gov. Arnold Schwarzenegger to speed up construction projects that would result in the hiring of 5,000 new workers.
California employers added 15,000 new jobs last month, according to data released yesterday by the state Economic Development Department. The strongest growth came from educational and health care services, which added 5,900 jobs.
Nevertheless, the unemployment rate jumped dramatically, rising from 5.6 percent in November to 6.1 percent in December, because the number of people entering the work force were greater than the number of jobs being added.
“Never has California seen unemployment rise this drastically in a period that was not officially considered to be a recession,” said Christopher Thornberg, co-founder of Beacon Economics in Los Angeles. “This significantly diminishes the outlook for the state economy and state budget in 2008.”
In addition, the real estate and financial industries continue to deteriorate. Statewide, financial firms – including mortgage and real estate brokerages – cut 4,200 workers last month and construction firms shed 2,000 jobs.
To combat the job losses, Schwarzenegger ordered the accelerated release of $300 million in funding for roads, highways and other transportation projects, as well as $200 million for levee reconstruction.
Those funds are already in the budget, but were not slated to be spent this early in the year. Among the projects are a $25 million expansion of Interstate 5 in San Diego County.
“Speeding up construction of roads, schools and levee repairs will help our economy continue to grow and keep more people working,” Schwarzenegger said.
Schwarzenegger said he is also working with the Legislature to speed the release of $29 billion in unallocated funds from the 2006 infrastructure bonds.
“I have spoken with all four legislative leaders, and we are committed to acting quickly on removing regulatory and statutory hurdles that hinder investment in new construction in both the public and private sector,” he said.
Despite December's relatively healthy hiring pace, job growth in California was dismal in 2007. Payrolls grew only 0.5 percent, the slowest growth since 2003 and half the national rate of 1 percent. It was only the third time since 1995 that California's job growth lagged the nation's. In comparison, California employment grew by 1.7 percent in 2006.
“It's unusual for California to grow slower than the U.S.,” said Jed Kolko, research fellow at the Public Policy Institute of California, an economic think tank in Sacramento. “The main reason is that the housing slowdown is worse here than elsewhere.”
Kolko added that even though California's employment growth was slow last year, it was nowhere near as bad as it was during the recession of the 1990s and was even a bit faster than the sluggishness following the dot-com crash in 2000.
“We're doing a lot worse than the best of years, but a lot better than the worst years,” Kolko said.
But a report by the U.S. Bureau of Labor Statistics suggested that job growth in California may be slower than the state is reporting. A BLS study released Thursday shows that California added 120,000 jobs between June 2006 and June 2007, compared to 207,000 jobs reported by the state.
The state is slated to revise its 2007 data on Feb. 29, using updated information similar to that used by the BLS.
Stephen Levy, director of the Center of the Continuing Study of the California Economy in Palo Alto, said the BLS report provides an indication of what will happen after the state revises its estimates.
“For the state, job growth for 2007 is likely to be revised sharply downward, resulting in minimum job gains,” Levy said. “Job levels will be revised sharply downward for construction, finance and manufacturing.”
Levy expects the revised figures to show job losses in Orange County and large downward revisions for the Riverside-San Bernardino area. On the other hand, the new BLS figure for employment in San Diego last June is slightly higher than the number that the state reported at the time.
According to the data released yesterday, San Diego County continues to perform better than the state as a whole, although it has recently been lagging behind the national average.
Unemployment rose only slightly in the county, from 4.8 percent in November to 4.9 percent in December, not adjusted for seasonal hiring fluctuations. In comparison, the unadjusted rate was 5.9 percent for California and 4.8 percent for the nation.
Murtaza Baxamusa, director of policy research at San Diego's Center for Policy Initiatives, said that if the local rate were adjusted for seasonal changes it would be higher, since it would not include the temporary hiring of retail workers for the holiday season.
In the past year, the county added 14,600 salaried jobs, for an increase of 1.1 percent. Last month, the county added 1,800 jobs, on a seasonally adjusted basis, led by 800 new jobs in professional, scientific and technical services and 600 in health care.
But local real estate brokerages cut 400 workers last month. Administrative and support services were down 400, telecommunications resellers 200, construction firms 100, and information technology firms 100.
Dean Calbreath: (619) 293-1891; dean.calbreath@uniontrib.com
By Dean Calbreath
UNION-TRIBUNE STAFF WRITER
January 19, 2008
Despite relatively strong job growth, the unemployment rate in California jumped above 6 percent last month, prompting Gov. Arnold Schwarzenegger to speed up construction projects that would result in the hiring of 5,000 new workers.
California employers added 15,000 new jobs last month, according to data released yesterday by the state Economic Development Department. The strongest growth came from educational and health care services, which added 5,900 jobs.
Nevertheless, the unemployment rate jumped dramatically, rising from 5.6 percent in November to 6.1 percent in December, because the number of people entering the work force were greater than the number of jobs being added.
“Never has California seen unemployment rise this drastically in a period that was not officially considered to be a recession,” said Christopher Thornberg, co-founder of Beacon Economics in Los Angeles. “This significantly diminishes the outlook for the state economy and state budget in 2008.”
In addition, the real estate and financial industries continue to deteriorate. Statewide, financial firms – including mortgage and real estate brokerages – cut 4,200 workers last month and construction firms shed 2,000 jobs.
To combat the job losses, Schwarzenegger ordered the accelerated release of $300 million in funding for roads, highways and other transportation projects, as well as $200 million for levee reconstruction.
Those funds are already in the budget, but were not slated to be spent this early in the year. Among the projects are a $25 million expansion of Interstate 5 in San Diego County.
“Speeding up construction of roads, schools and levee repairs will help our economy continue to grow and keep more people working,” Schwarzenegger said.
Schwarzenegger said he is also working with the Legislature to speed the release of $29 billion in unallocated funds from the 2006 infrastructure bonds.
“I have spoken with all four legislative leaders, and we are committed to acting quickly on removing regulatory and statutory hurdles that hinder investment in new construction in both the public and private sector,” he said.
Despite December's relatively healthy hiring pace, job growth in California was dismal in 2007. Payrolls grew only 0.5 percent, the slowest growth since 2003 and half the national rate of 1 percent. It was only the third time since 1995 that California's job growth lagged the nation's. In comparison, California employment grew by 1.7 percent in 2006.
“It's unusual for California to grow slower than the U.S.,” said Jed Kolko, research fellow at the Public Policy Institute of California, an economic think tank in Sacramento. “The main reason is that the housing slowdown is worse here than elsewhere.”
Kolko added that even though California's employment growth was slow last year, it was nowhere near as bad as it was during the recession of the 1990s and was even a bit faster than the sluggishness following the dot-com crash in 2000.
“We're doing a lot worse than the best of years, but a lot better than the worst years,” Kolko said.
But a report by the U.S. Bureau of Labor Statistics suggested that job growth in California may be slower than the state is reporting. A BLS study released Thursday shows that California added 120,000 jobs between June 2006 and June 2007, compared to 207,000 jobs reported by the state.
The state is slated to revise its 2007 data on Feb. 29, using updated information similar to that used by the BLS.
Stephen Levy, director of the Center of the Continuing Study of the California Economy in Palo Alto, said the BLS report provides an indication of what will happen after the state revises its estimates.
“For the state, job growth for 2007 is likely to be revised sharply downward, resulting in minimum job gains,” Levy said. “Job levels will be revised sharply downward for construction, finance and manufacturing.”
Levy expects the revised figures to show job losses in Orange County and large downward revisions for the Riverside-San Bernardino area. On the other hand, the new BLS figure for employment in San Diego last June is slightly higher than the number that the state reported at the time.
According to the data released yesterday, San Diego County continues to perform better than the state as a whole, although it has recently been lagging behind the national average.
Unemployment rose only slightly in the county, from 4.8 percent in November to 4.9 percent in December, not adjusted for seasonal hiring fluctuations. In comparison, the unadjusted rate was 5.9 percent for California and 4.8 percent for the nation.
Murtaza Baxamusa, director of policy research at San Diego's Center for Policy Initiatives, said that if the local rate were adjusted for seasonal changes it would be higher, since it would not include the temporary hiring of retail workers for the holiday season.
In the past year, the county added 14,600 salaried jobs, for an increase of 1.1 percent. Last month, the county added 1,800 jobs, on a seasonally adjusted basis, led by 800 new jobs in professional, scientific and technical services and 600 in health care.
But local real estate brokerages cut 400 workers last month. Administrative and support services were down 400, telecommunications resellers 200, construction firms 100, and information technology firms 100.
Dean Calbreath: (619) 293-1891; dean.calbreath@uniontrib.com
Labels: California, unemployment
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