Los Angeles Business Journal

County Unemployment Rate Falls to 9.6 Percent

By Howard Fine Originally published June 21, 2013 at 2:29 p.m., updated June 21, 2013 at 12:01 p.m.

L.A. County’s unemployment rate fell again in May, reaching 9.6 percent, according to state figures released Friday.

The employment gains were tempered by unexpectedly large job losses in the entertainment sector, which caused employer payrolls to shrink by more than 15,000 jobs. That drove down the annual pace of job formation, according to state Employment Development Department figures.

The county’s 9.6 percent unemployment rate was down from 9.9 percent in April and 11.1 percent a year ago. In an encouraging sign, more county residents reported finding work, even as the number of people in the labor force grew.

Despite the decline, the county’s unemployment rate remains above the statewide rate of 8.6 percent and is way above the 6 percent jobless rate reported for Bay Area counties. The county’s two largest cities, Los Angeles and Long Beach, still have double-digit unemployment of 10.2 percent.

The promising consecutive monthly decline in the unemployment rate was offset by the unexpected drop of 15,500 nonfarm payroll jobs to just over 3.9 million. All of that drop – and more – was attributed to a plunge of nearly 17,000 jobs in the notoriously volatile film and television sector. Manufacturing and construction also saw drops of about 2,000 payroll jobs each.

The leisure and hospitality sector added 5,300 jobs as the summer tourism season kicked off. And, for the first time in a while, local governments added about 3,000 jobs as budget pressures eased.

Payroll jobs figures are culled from periodic surveys of local employer payrolls, while the unemployment rates are based on surveys of local residents reporting whether they are working. Part of this month’s disparity between these two separate surveys could be due to an increase in the informal labor force, made up of contract or freelance workers or in cash-only jobs. These types of jobs do not show up on employer payrolls.

The decline in payroll jobs meant that the closely watched year-over-year job creation rate slowed in May to 1.1 percent as 44,000 net jobs were added to county employer payrolls. The year-over-year rate had been hovering around 2 percent in recent months.

Professional and business services had the biggest job gain over the past 12 months, up nearly 22,000 jobs; more than half of that increase came from a jump in temporary employment services. Local government payrolls saw the biggest decline of roughly 7,500 jobs.