California unemployment hits post-World War II high
The rate jumped unexpectedly in July to 11.9% even as the national rate declined.
By Alana Semuels
11:30 AM PDT, August 21, 2009
California's unemployment rate took an unexpected leap in July, reaching a post-Word War II high of 11.9%. The increase contrasts with the national rate, which declined slightly over the same period, and reflects ongoing weakness in the state's battered construction and financial services industries.
The state lost a net 35,800 jobs last month, more than any other state, the U.S. Labor Department said today. It has lost 760,200 jobs over the last year.
Every category of nonfarm jobs in the state except education and health services experienced year-over-year losses. The construction sector was the hardest hit, shedding 18.6% of its jobs. Manufacturing jobs fell 8.7% from the same time last year.
But there is reason to be optimistic, economists said, because the rate of job loss seems to be slowing. In June, the state lost 66,500 jobs. In May, it lost 68,900.
"Historically, unemployment rates continue to rise after the end of the recession," said Jerry Nickelsburg, a senior economist with the UCLA Anderson forecast. "We're not creating enough jobs, we're losing jobs, and so that makes the unemployment rise."
Two categories, professional and business services, and leisure and hospitality, added jobs over last month. Employment in other sectors, such as natural resources, mining and financial activities, stayed consistent from last month, which economists say is a good sign.
The seasonally adjusted unemployment rate in Los Angeles County also reached 11.9% in July, up from a revised 11.2% in June. The government sector was especially hard hit as state budget cuts took their toll, with the number of jobs dropping 4.6% from June. Education and health services was the only sector in the county to employ more people this month than it did in July of last year.
The Riverside-San Bernardino-Ontario metropolitan area felt the most pain in the Southland, with the unemployment rate rising to 14.3% in July, up from a revised 13.9% in June. The area is affected by the downturn in the international economy, with the trade, transportation and utilities sector losing 20,100 jobs from July of 2008. The construction sector lost 20,700 jobs in the area since July 2008.
Unemployment rates continued to sneak upwards in Orange and Ventura counties as well, at 9.5% and 10.9% respectively. Orange County shed 7,900 jobs from last month, and 68,000 over the last year. Ventura County lost 8,000 jobs last month, but only 15,100 over the past year.
California is tied with Oregon for the fourth-highest unemployment rate in the nation, behind Michigan, Rhode Island and Nevada. June's unemployment rate of 11.6% had set a post-World War II record.
The state is shedding jobs at a faster rate than the nation because of its onetime dependence on the construction sector, economists said. While the financial crisis can be tied to overexuberance in the residential housing market, nonresidential construction is now sluggish as well, shedding more jobs, said Esmael Adibi, an economist at Chapman University.
"We're disproportionately benefited from two sectors, construction and financial services," he said. "The demise of these two sectors have hurt us disproportionately higher."
Building levels have fallen from $63 billion in 2005 to $23 billion this year, said Steve Levy, senior economist at the Center for the Continuing Study of the California Economy .
The number of people waiting outside a U-Haul in Hollywood looking for labor seems to grow every month, said Silver Lake resident Orlando Garcia, who stands on Hollywood Boulevard seven days a week, looking for work.
He's willing to do anything: construction, lawn work, moving assistance. But these days, it's heavy competition for fewer and fewer jobs.
"It's like a lottery," he said. "We're all waiting, all the time."