Update: L.A Jobless Rate Hits 9.9 Percent

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The recession is now hitting Los Angeles County with furious force.

The county’s unemployment rate shot up to 9.9 percent in December from 8.9 percent in November, reaching its highest level in 15 years. The entertainment industry, manufacturing and construction all sustained heavy job losses.

Roughly 475,000 L.A. County residents were unemployed in December, up a whopping 82 percent from December 2007, when the unemployment rate was 5.2 percent. Last month’s unemployment rate would have been even worse except that the labor pool declined by 30,000 as people stopped looking for work.

Statewide, the unemployment rate jumped to 9.3 percent in December from 8.4 percent in November and 5.9 percent in December 2007. Nationwide, the unemployment rate was 7.2 percent last month.

“This is not pretty at all,” said Nancy Sidhu, chief economist with the Los Angeles Economic Development Corp. “And with all the layoff announcements recently, we can expect even higher unemployment numbers in coming months.”

Los Angeles County lost 12,400 non-farm payroll jobs between November and December, which is highly unusual, since employment typically surges during the holiday season.

The biggest losses in December occurred in the motion picture industry (down 4,600 jobs) and manufacturing (down 2,900 jobs). In the entertainment sector, the prospect of an actors’ strike prompted film production companies to speed up their projects, which led to a lull in December, Sidhu said.

In the closely watched year-over-year job figures, total nonfarm payroll employment fell in December by 41,500 or 1 percent, to 4,103,400 as compared with December 2007. This is a much smaller drop than the corresponding decline of 236,000 in the ranks of county residents saying they were employed; those figures are compiled from a survey of households.

One reason for this discrepancy: “Large numbers of people who were self-employed are now seeing work disappear from their clients, so they are now unemployed,” Sidhu said.

She added that many people who have received layoff notices are telling household surveyors that they are unemployed, even though they may still have several weeks remaining on company payrolls.

Nearly half of the payroll job loss for 2008 came from the beleaguered retail sector, which shed 19,300 jobs. That’s not including nearly 2,000 jobs cut in L.A. County by the now closed Mervyn’s department store chain or the forthcoming cuts as Circuit City liquidates; those job losses will show up in the January and February figures.

The manufacturing sector continued to hemorrhage jobs, losing 13,100 payroll jobs during 2008. Construction posted payroll reductions of 8,600 over the year.

Health services remains one of the few bright spots, posting a gain of 11,000 jobs during 2008.

Also, some sectors like information technology and health care are seeing an increase in temporary hires, often a leading indicator of an economic recovery, according to Jodi Chavez, senior vice president for the West Coast for Ajilon, a division of Swiss employment services firm Adecco Group.

“In November and December, everything came to a halt,” Chavez said. “Now, some companies are realizing that work still needs to get done but they are reluctant to hire full-time staff in this economic environment, so they are hiring temporary help.”

On the city level, both Los Angeles and Long Beach took big hits as their unemployment rates surged to 10.5 percent. Jobless rates were much higher in several other cities in the county’s industrial zone south and east of Downtown Los Angeles, including Compton (16.4 percent), Lynnwood (15.2 percent) and Paramount (14 percent).

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