State data show more than 143,000 jobs lost in past year
Consumer-driven recession cited
Graphic: San Diego County jobs |
Retailers – hard hit by economic jitters and a sharp decline in consumers'spending power – have cut thousands of jobs over the past year, according to data released yesterday by the California Employment Development Department.
“California is moving from a housing-driven slowdown to a consumer-driven recession,” said Steve Levy, who heads the Center for the Continuing Study of the California Economy in Palo Alto.
California lost a total of 35,700 jobs in retail stores between September 2007 and September 2008, as well as 76,700 in construction, 31,400 in financial services and 6,900 in the information industry.
During the same time, San Diego County lost 3,000 retail jobs, in addition to 6,800 jobs in construction and 4,100 in financial activities. During the past month alone, there were 1,000 retail job losses, although part of that decline may have been seasonal fluctuations from the end of the summer tourism season.
Although many of those job losses were offset by job growth at bars, restaurants, hospitals and education services, the county lost a net total of 5,100 jobs. That helped push the unemployment rate to 6.4 percent in September from 4.8 percent a year ago. The state also adjusted the August unemployment rate to 6.5 percent – the highest point since October 1995 – from an earlier reported 6.1 percent.
Statewide, unemployment was at a 12-year high of 7.7 percent in August and September. During the same period, the national jobless rate hovered at 6.1 percent. Since retail sales make up about two-thirds of the gross domestic product, Levy said the drop in retail business is evidence that the economy is slowing down. Levy said consumers are being hit with a “triple whammy of rising job losses, sharp drops in their housing and stock market wealth and tightening access to credit.” He said the state's jobless rate could surge as high as 9 percent – approaching the highs of the post-Cold War recession – within the next year. The job cuts in retail come after a sharp cutback in consumer spending. The latest sales figures from the state Department of Finance show that retail sales in San Diego County declined 1.3 percent during the second quarter of last year and 4.5 percent during the third quarter. “It takes about a year for the state to produce the sales figures, but I'm sure the fourth quarter of last year wasn't very good either,” said Kelly Cunningham, economist with the San Diego Institute for Policy Research. Cunningham said the retail slowdown is directly related to the mortgage crisis. “A lot of people are upside-down in their mortgages (meaning they owe more on their house than its current market value) or are so heavily indebted that they have to cut back on spending,” Cunningham said. “That's going to impact retail stores that are going to start laying off people or shutting their doors.” Just yesterday, the Mervyn's department store chain announced that it was going out of business – which Cunningham said could be the shape of things to come. The job losses hit a wide variety of retailers. Over the past year in San Diego County, 1,000 jobs were lost in garden and home supply stores, 900 in auto lots, 600 in furniture showrooms, 400 in general merchandise stores, 300 in health boutiques and beauty salons and 100 in clothing stores. The only retail segments that saw any growth were food and liquor stores, which added 500 workers, and sports, hobby, book and music stores, which added 100. Christa Shapiro, who oversees San Diego County for the Adecco employment agency, said the employment scene isn't totally bleak. “We're actually more fortunate than some regions, since we do have a couple of area that is improving: bioscientific and health care,” she said. Scientific research firms added 1,100 workers over the past year and local hospitals added 1,000 positions, according to the state government data.
Dean Calbreath: (619) 293-1891; dean.calbreath@uniontrib.com
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