State Gains 40,600 Jobs in December

The California economy, capping a stellar year of employment growth, added 40,600 new jobs in December, pushing state payrolls to record levels for the 26th consecutive month.

The state has now added about 1.3 million jobs since the low point of the recession in 1993, and is nearly 800,000 jobs ahead of the previous employment peak in 1990, the Employment Development Department reported Friday.

The unemployment rate edged up to 6%, seasonally adjusted, from a revised 5.9% in November, but economists attributed the increase to statistical quirks in the way the numbers are counted rather than an indication of any slowing.

“It’s boom times in California,� said Mark Zandi, chief economist at Regional Financial Associates in West Chester, Pa. “The growth is stupendous, and it’s very broad- based. You’re hard-pressed to find a business that’s not adding to payrolls.�

Last month’s rate was well below the 6.8% jobless rate in December 1996. The average rate for the year, 6.4%, was substantially improved from 1996’s average of 7.2%.

“The economy, if anything, seemed to be picking up steam at the end of the year,� said Ted Gibson, chief economist at the state Department of Finance. “Aside from Asia, it’s hard to find any clouds on the horizon.�

In Los Angeles County, the unemployment rate also edged up to a seasonally adjusted 6.5%, from a revised 6.4% in November, but was well below the 7.8% rate a year earlier.

The motion picture and electronics fields are “really smoking,� said Jack Kyser, chief economist at the Economic Development Corp. of Los Angeles County. They helped push up total county employment by 79,000 jobs last month.

The good news in the jobs report was tempered somewhat by Raytheon Co.’s announcement Friday of plans to eliminate 5,200 jobs in Los Angeles and Orange counties over the next two years. “We knew there were going to be some job losses,� because of aerospace industry consolidation, said Kyser, but the depth of the cuts is “very disappointing.�

Even so, he said, the county is now creating enough jobs to absorb most of the blow.

In Orange County, one of the tightest job markets in the state, the unemployment rate dropped to a razor-thin 2.5%, unadjusted, from 2.8% in November and 3.1% a year earlier.

California’s unemployment rate is still higher than the 4.7% rate registered for the nation as a whole in December. But the state’s 2.8% annual increase in payroll employment well-eclipsed the national growth rate of 2.5% last year.

Economists say that California’s economy has entered a positive self-reinforcing cycle, in which the plentiful jobs are attracting more people to the state. The population gains are putting added pressure on the construction industry, thus creating more demand for workers.

Though the building trade is expected to be a major driving force this year, it isn’t the only industry keeping the momentum going, economists say. Virtually all sectors--from manufacturing to tourism to software to government--are adding jobs.

Only the transportation industry lost jobs from November to December, with a decline of 600. Services showed the largest growth, with a gain of 22,700 jobs for the month. Most of that increase came in business services, which include computer and software services, advertising, cleaning and maintenance, credit reporting and temporary-help agencies.

Retailers added 3,000 employees last month, and construction payrolls swelled by 7,700.

For the year, the state added 493,000 jobs, with service employment contributing 157,800 jobs to the total.

In another sign that the state’s expansion has taken hold throughout Southern California, the Riverside-San Bernardino unemployment rate plunged in December to an unadjusted 5.3%, from 6.1%. And Ventura County’s rate plummeted to 5.7%, unadjusted, from 6.7% in November.

For now, the impact of the troubles in Asia seems to be muted because of strong demand in other markets, said economist Gibson. Many high-tech firms, for example, are flooded with work preparing computer systems for the year 2000, and regearing networks in Europe to accommodate next year’s monetary union.

Although Asia’s economic woes are sure to have some negative effect on the state’s exporters this year, most economists expect the state’s unemployment rate to continue to narrow--possibly reaching the low 5% range by year-end.

Job Growth

California added 40,600 jobs in December, pushing jobless rates lower.

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County Dec. ’96 Dec. ’97 Los Angeles* 7.8% 6.5% Ventura 6.4% 5.7% Riverside/San Bernardino 6.3% 5.3% San Diego 4.1% 3.1% Orange 3.1% 2.5% California* 6.8% 6.0% United States* 5.3% 4.7%

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* Adjusted for seasonal factorsSource: Employment Development Dept.