O.C.’s 3.1% Jobless Rate Is Seven-Year Low

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

That’s the lowest level of joblessness in the county since April 1990, prompting another round of bullish projections by economists. Only three other counties, all in Northern California’s technology belt, had lower unemployment rates last month.

“It seems like the employment engine for Orange County is shifting into high gear,” said Anil Puri, director of Cal State Fullerton’s Institute for Economic and Environmental Studies.

The decline from November’s 3.5% unemployment rate was led by a seasonal upswing in retail jobs. As stores geared up for the holidays, 5,800 new retail workers were added to county payrolls. The only month-to-month drop was in construction, which normally slows at the end of the year.

But the annual job gains for Orange County were particularly striking. A total of 31,400 nonfarm jobs have been added since December 1995, bringing total nonfarm employment in the county to 1.2 million.

That’s the biggest December-to-December increase in county business payrolls since 1988. More than 50,000 jobs lost in the county during the recession earlier in the decade have now been replaced--and then some.

A wide range of businesses boosted their payrolls in the county last year, led by 14,300 new service jobs. Tourism added 4,500 new jobs; manufacturing, 4,000; wholesale trade, 3,500; retail and construction, 3,000 each, and government, 2,900. Only the mining sector remained unchanged from a year earlier.

Economists said they expect the healthy growth rate to continue during 1997.

“The sources of growth are really quite encouraging in the county,” said Ted Gibson, an economist at the state Department of Finance.

Industries that export heavily, such as computer software, showed strong gains. Even the downsized aerospace industry showed a small uptick for the year.

Despite Orange County’s low unemployment rate, Gibson sees little pressure on salaries because employers can draw workers who live in Los Angeles and Riverside counties, where the jobless rates are much higher.

Esmael Adibi, director of Chapman University’s Center for Economic Research, cautioned that since Orange County’s unemployment rate is not adjusted for seasonal variations, a decline from November to December is always expected.

Nonetheless, the 2.7% jump in total nonfarm employment in the county in 1996 was good news. The 2% increase in manufacturing employment was “the strongest growth that we have seen in manufacturing since 1990,” Adibi said.

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

Preliminary figures now show California gaining 322,200 jobs in 1996, the best since the 1988 tally of 420,500.

“It’s beginning to feel like the old California again,” said a buoyant Gibson.

California’s seasonally adjusted 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%.

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 a seasonally adjusted 7.5%, down from 7.8% the month before and 7.9% in December, 1995.

“The good news is Los Angeles County is back to adding jobs, but it’s still struggling to get back to peak employment,” said Ross DeVol, a regional economist at WEFA Group, a Philadelphia economic consulting firm.

More than two-thirds of all the jobs lost in the state during the recession were in Los Angeles County. DeVol predicted it would be another year before the county recovers those jobs.

The generally upbeat California unemployment report followed a Labor Department report released earlier this month, showing the national unemployment rate remained at 5.3% in December, the lowest year-end level since 1988. About 2.6 million more Americans were employed last year.

Meanwhile, 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%. Those figures are not seasonally adjusted.

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Employment Engine

Orange County’s December unemployment rate, 3.1%, marked the fifth consecutive monthly decline in joblessness and was the lowest in almost seven years. The trend:

1995

Dec.: 4.3

*

1996

Jan.: 4.7

Feb.: 4.6

March: 4.3

April: 4.2

May: 4.2

June: 4.3

July: 4.5

Aug.: 4.3

Sept.: 4.2

Oct.: 3.8

Nov.: 3.5

Dec.: 3.1

Source: Employment Development Department