State Sees Strongest Employment Growth Since ’88

Last month’s stormy weather temporarily slowed California’s job gains, but December still appears to have capped the state’s best year for employment growth since 1988, officials said Friday.

California’s jobless rate also showed improvement in December, edging down to 6.8% from a revised 7% the month before. The state, where unemployment through much of 1996 kept hitting lows not seen in five to six years, now boasts its best jobless rate since November 1990, when it also was 6.8%.

What’s more, preliminary figures now show California gained 322,200 jobs in 1996, the most since the 1988 tally of 420,500.

“It’s the best year we’ve had in the ‘90s, and it’s beginning to feel like the old California again,” said a buoyant Ted Gibson, economist for the state Department of Finance.

December, to be sure, was a downbeat month, with the state showing a job gain of 7,900, down from a monthly average of 26,850 for all of 1996. But Gibson and other analysts attributed the weakness to wet, wintry weather that put a crimp in such industries as construction.

Even Los Angeles County, which has made only a fragile recovery from the state’s recession, showed improvement last month. The county’s jobless rate in December was 7.5%, down from 7.8% the month before and 7.9% in December 1995.

Gibson said the state outlook remains bright for 1997 because of “the continued strength in our key export industries, such as electronics, aerospace and computer software and business services. As long as those are growing, I would not be terribly concerned” about December’s thin job gain. The recent modest gains in aerospace, analysts said, are particularly significant in that the state’s severe recession of the early 1990s was triggered by a nose dive in the industry.

The entertainment industry also has been a major force in the state’s comeback.

Another encouraging sign was an upward revision in the number of jobs added by the state in November to 35,000, up from the previously reported 29,700. November’s jobless rate, however, was raised to 7% from a previously estimated 6.9%.

“We’re going into 1997 with a good deal of momentum,” said Howard L. Roth, a senior economist at Bank of America.

Roth and other economists forecast that California payrolls will grow by an additional 2.5% this year.

Coupled with California’s retail sales growth in December, which outpaced the national rate, the growing jobs market might usher in a strong increase in consumer confidence, said Ross DeVol, a regional economist at WEFA Group, an economic consulting firm. If consumers are feeling better about the economy, the state’s housing market might finally begin to show signs of life.

In Los Angeles, however, many analysts expect the county’s official job growth estimates to be cut substantially when the results of an annual revision in the California figures are announced next month.

Still, Michael Caplis, the California Employment Development Department’s research manager for Southern California, said that “it appears things are getting better [in Los Angeles County] because we’re getting job growth in services and trade. Gradually, things will be improving.”

In Orange County--whose jobless rate, unlike the state and Los Angeles County’s, is not adjusted for seasonal trends--the picture is much brighter.

Orange County’s unemployment rate, continuing the trend that has turned the region into Southern California’s hottest job market, narrowed to 3.1% in December, down from 3.5% in November.

That’s the lowest level of joblessness in the county since April 1990. Only three other counties, all in Northern California, had lower unemployment rates last month.

Even though California’s rate of job growth is outstripping the nation’s, the state’s jobless rate remains well above the U.S. average. The nation’s unemployment rate for December, reported two weeks ago, was 5.3%, unchanged from the month before.

The unemployment rates of other Southern California counties also fell in December. In Ventura County, the rate declined to 6.4% from November’s 7.5%. Riverside’s jobless rate sank to 7.1% from 8.3%, and San Bernardino’s decreased to 5.6% from 6.4%. In San Diego County, the rate was 4%, down from 4.7%. However, those figures are not seasonally adjusted.

OVERTIME RULES THREAT: A state panel has proposed changes in overtime pay regulations. A1

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California Jobless

The state’s unemployment rate edged lower in December. Unemployment rate:

Dec. 1996: 6.8%

Source: Labor Department