O.C. Unemployment Is Lowest Since March : Economy: Despite bankruptcy-related layoffs, a net yearly gain of 5,300 jobs is reported. The jobless rate of 5.1% is the best in region.

SANTA ANA —  Bolstered by a second consecutive month of modest job growth, Orange County’s unemployment rate dropped to 5.1% in September from 5.5% in August.

Last month’s jobless count was 69,300, the lowest since March. A year earlier, the county’s jobless rate was 6% and state labor analysts estimated that almost 80,000 county residents were without work.

A spurt of seasonal hiring by local school districts for the new school year contributed to the improved employment picture, adding 8,300 jobs to local payrolls. Although most of these jobs will disappear again when school ends in June, economists say other indicators in the monthly report point to slow but steady economic recovery.

One strong sign of sustained growth, state labor analyst Eleanor Jordan reported Friday, is that Orange County has gained 5,300 jobs in the 12 months since September, 1994. Although that growth rate--0.5%--is anemic, it is better than the zero growth that some economy watchers feared might happen in the wake of the county government’s bankruptcy at the end of last year.

“The bankruptcy did slow things down,” said Anil Puri, head of the economics department at Cal State Fullerton. “We think we might have had several thousand more jobs if it hadn’t happened.”

In addition to depressing private businesses’ appetite for expansion, the bankruptcy cut 1,300 jobs from government payrolls, largely because the county ordered up layoffs to slash operating costs.

Still, Jordan’s report pegs the number of jobs in the county last month at 1,136,700--the highest September tally since 1991, when there were 1,142,900 jobs on local payrolls for the month.

Her report lists the county’s so-called payroll work force--people who work for hourly wages or salaries.

A separate report that includes self-employed workers in its job estimates was even more encouraging, showing an increase of 30,000 workers in the county since September, 1994.

“That’s an important figure,” said Chapman University economist Esmael Adibi. “These people are working and producing income, and the growth there is 2.4%.”

The increases among payroll and self-employed workers occurred almost entirely in the service sector. The county’s manufacturing industries continued trimming payrolls.

Many economists and social critics believe that a steady loss of manufacturing employment can weaken a region’s economic underpinnings, and some worry that growth in the service sector doesn’t mean much if higher-paying, skilled manufacturing jobs are being replaced by positions for short-order cooks and movie theater ushers.

Adibi, however, said that his reviews of local employment trends show that manufacturing in the county is becoming more productive because of technological advances that require fewer workers.

“And in the services,” he said, “we have a growing information component that includes people producing computer software, doing medical research and development and providing accounting and business services. This is an area that is growing, and these are not low-paying jobs.”

The increase in self-employment is a statewide trend, said Bruce Devine, chief economist for the Southern California Assn. of Governments.

“The ranks are swelling, and we think that it is in part because of the trend by business to stop hiring services like accounting and to go to outside contractors. A lot of these people are becoming agents and contractors [after losing their payroll jobs], but they still are in highly paid professions. The growth in service work isn’t all hamburger flippers.”

Orange County’s jobless rate remained much lower than the statewide rate of 7.1% and was better than unemployment figures for surrounding counties as well.

Among other Southern California counties, Riverside was highest at 10.1%, and Santa Barbara was lowest at 6.1%. Jobless rates for the month were 6.3% in San Diego County, 7.1% in San Bernardino County, 7.5% in Los Angeles County and 7.6% in Ventura County.

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(Orange County Edition, A1) Jobless Decline

Orange County unemployment fell to a six-month low in September:

September, 1995: 5.1%

Source: State Employment Development Department

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Employment Picture Brightens

Orange County’s September jobless rating was the lowest for any September since 1990. In the last year, employers in the county have added 5,300 non-farm jobs, a 4.7% increase. Service businesses accounted for the growth while finance, manufacturing and government took the biggest hits.

September Unemployment

1990: 3.8%

1991: 5.3%

1992: 7.0%

1993: 7.1%

1994: 6.0%

1995: 5.1%

Non-Farm Job Growth/Losses, September 1994-95

Gains

Services: 6,800

Wholesale trade: 4,100

Transportation: 1,100

Construction: 900

Communications/public utilities: 800

Resale trade: 400

Losses

Finance: 2,700

Manufacturing: 2,100

Government: 2,100

Real estate: 1,000

Insurance: 800

Mining: 100

Bankruptcy Effect

Layoffs attributed to the county bankruptcy account for the majority of the 2,000 jobs trimmed by local government agencies since September. Here’s how those 2,000 divide:

Jobs lost

County government: 70%

City government: 25%

Special districts: 5%

Source: State Employment Development Department; Researched by JANICE L. JONES/Los Angeles Times