County Hit by Big Job Losses

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L.A. County’s job market tumbled last month as the writer’s strike took its toll, putting the local economy on the verge of a recession, according to state figures released Friday.

The county’s unemployment rate shot up to 5.7 percent in January from 5.4 percent in December. It’s now a full percentage point above the January 2007 level, according to figures from the state Employment Development Department.

The main culprit: a drop of 46,000 in civilian employment rolls, with many of those being striking writers.

The county lost 75,800 non-farm payroll jobs from December to January, one of the biggest monthly job losses in years. The information sector, which includes the motion picture industry, lost 19,700 jobs, many of those so-called “below the line” production workers at studios and on soundstages. Retail trade and food services also suffered significant seasonal job losses.

The year-over-year job picture also turned negative for the first time since 2004, as total non-farm employment dropped by 4,100 jobs, or 0.1 percent, to 4,069,100 jobs. Local economists define a recession as two consecutive months of year-over-year job losses.

“We’re teetering right on the edge of recession,” said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. “What’s keeping us afloat is strength in some other areas, like tourism, professional services and temporary help.”

Even though the writers’ strike has been settled, it will take several months before the industry recovers. Kyser said that with cancelled shows, motion picture and sound recording industry employment is not likely to reach pre-strike levels again this year if ever.

Also hitting the local economy hard has been the real estate slowdown and related credit crunch. The financial activities sector including banks, mortgage lenders and other financial institutions saw a drop of 7,300 jobs, while construction declined by 5,200 jobs.

Manufacturing also continued its long, steady decline, losing 8,700 jobs in the past 12 months.

Yet several industries continued to perform well, including education, health services, leisure/ hospitality and professional and business services. One surprising positive performer was the publishing sector, which gained 800 jobs since a year ago despite repeated rounds of cuts at local newspapers. Those cuts were offset by a surge in software publishing employment.

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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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