Unemployment Up, Economy Still Strong

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L.A. County’s unemployment rate rose to 5.1 percent in September from 4.9 percent in August as homebuilding woes continue to take their toll on the local workforce.


The jump in the unemployment rate, up from 4.6 percent in August 2006, came despite a hefty increase of 32,500 non-farm payroll jobs during September, driven mostly by teachers returning to school and a stockpiling of film and television productions in advance of a possible writers strike. The Writers Guild of America is holding a strike authorization vote today.


“There’s a tremendous amount of uncertainty in the entertainment industry, which is driving a frantic rush to complete productions,” said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp.


The stockpiling, which has been going on for several months, has helped drive a 38,200 increase in payroll jobs since September 2006. However, the job growth pace for 2007 of about 1 percent is lower than in recent years, reflecting the decline in construction-related employment.


Construction jobs are down 4,400, or 2.8 percent, year-over-year, with the steepest drops coming in residential building construction and among specialty trade contractors. “We’re finally starting to see the decreases in homebuilding hit the entire construction sector hard,” Kyser said.


The impact of the homebuilding slowdown is likely far worse, since many of those laid off were either independent contractors or day laborers that are not counted in the payroll figures. Kyser said this may account for the steeper-than-expected drop of 25,000 in the civilian employment rolls in September. These figures are taken from a household survey and frequently diverge from payroll jobs numbers that are compiled directly from employer submissions to the state.


The homebuilding woes also are showing up in the manufacturing sector, helping to drive furniture making jobs down 4.7 percent to 22,000 in September from year-ago levels. That in turn has kept the downward pressure on overall manufacturing employment in the county: the sector has shed 6,300 jobs over the past year.


On the positive side, the lower dollar is boosting the tourism sector with international tourists flocking to the region. Leisure and hospitality employment has jumped by 9,300 jobs, or 2.4 percent, over the last 12 months.


Statewide, the unemployment rate edged up to 5.6 percent in September from 5.5 percent in August and up significantly from 4.8 percent in September 2006.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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