L.A. County's most recent published unemployment rate doesn't reflect the reality of today's job market, as layoffs in a wide variety of industries continue to mount, economists and labor consultants said. They expect that official statistics will soon show the darkening trend.

The Walt Disney Co.'s announcement last week that it would slash 4,000 jobs companywide is among several mass layoff announcements made in L.A. since January, none of which are reflected in the most recent employment statistics.

In fact, the California Economic Development Department's widely reported employment statistics for L.A. paint a pretty picture, with the local unemployment rate falling in February to 4.6 percent, down from 5.3 percent in January. March statistics are due out in mid-April.

"We keep hearing about all the doom and gloom in the economy, but it's not reflected in our local unemployment statistics," said EDD labor consultant Bill Freed.

Jack Kyser, chief economist for the L.A. County Economic Development Corp., agreed.

"You're going to see more layoffs in L.A.," Kyser said "So far, we seem to have been immune. All the numbers in L.A. County look great. But given what's happening to the economy, it can't hold."

While Disney's recent announcement will impact mostly theme park employees in Anaheim and Orlando, the company announced in early February that it would cut 400 jobs from its Burbank-based Internet unit.

Another entertainment giant with a major presence in L.A., AOL Time Warner, announced in late January that it would slash 2,000 jobs, 600 from its local Warner Music Group and 100 from its Warner Bros. movie studio.

Soaring natural gas prices were cited as the primary cause of mass layoffs at one of Southern California's largest textile firms, L.A. Dye & Print Works Inc. The Pico Rivera company announced in late February that it would shut down in April, putting 700 employees out of work.

Torrance-based Summa Industries announced just a few weeks ago that it would cut 13 percent of its workforce, or about 130 jobs, because of slowing demand for its molded plastic parts.

Internet layoffs

The slowdown in advertising spending and the economy's overall weakness has triggered recent layoffs at a slew of local Internet-related companies, like Business.com, Icebox.com, Xdrive and Creative Planet to name just a few. Not all the layoffs in that sector were insignificant. Online retailer eToys, for example, shut down its swanky Santa Monica headquarters in January and pink-slipped about 700 employees.

It's unlikely that these more recent, sector-wide layoffs are reflected in current employment data, so the announcements are cause for immediate concern.

"The announcements are certainly a heads-up to us that things may be getting soft in the future, which has been our expectation all along," said Ted Gibson, chief economist for the California Department of Finance. "Last month's employment figures show no evidence of weakness, but we may not see the effects of the layoff announcements until May or June."

There is a lag between the announcements and what shows up in employment data because most pink-slipped employees are given severance packages or notices that make them temporarily ineligible for unemployment insurance. And the number of unemployment insurance claims is one of the key figures that the EDD uses to determine its unemployment rate.

The ongoing energy crisis, the national slowdown in technology spending and the looming strike in the motion picture industry will probably trigger layoffs in nearly every sector of the local economy.

"It's almost easier to say, 'Which sector isn't going to be impacted?'" Kyser said. "I think there are going to be unexpected announcements, like Disney's, that come out of nowhere."

Labor problems in the airline industry could mean additional woes for the local economy, according to Kyser. Employees at almost all the nation's major airlines are threatening to strike in coming months.

"It's a sector that we have to watch," he said. "Is President Bush going to be able to head off the strikes? The outcome could impact business and tourist flows in L.A."

At the moment, L.A. and the state of California are still chugging. The statewide unemployment rate was 4.5 percent in February, down from 4.6 percent in January and the lowest since 1969. Nationally, the unemployment rate stayed at 4.2 percent through January and February.

Energy crisis

The EDD has reported that fewer than 1 percent of the 300,000 Californians who applied for unemployment insurance from January through mid-February said their joblessness was connected to the energy crisis. The office has also said that it is still receiving requests from employers who are seeking workers. Overall, the EDD reported that 38,000 new jobs were created in the state in February.

However, Gibson said that the Department of Finance might revise downward its forecast for job growth in the state this year. He previously had projected that the state, which posted a 3.8 percent job growth rate in 2000, would slow to 2.8 percent in 2001. Now, Gibson said 2.8 percent might be "on the high side."

While most economists agree that the local employment picture will darken, it may not be as hard hit as other areas.

"L.A. is going to be better off than San Francisco and Silicon Valley, which were really driven by the technology boom," Kyser said. "A bubble developed there in the residential and office markets, all based on stock option gains. We didn't grow at that rate, but that could be a blessing."

Nonetheless, Kyser said, "it's going to be a very unnerving year a year to be careful and watchful."

Pink Slips Galore

Some of the major L.A.-area layoffs announced so far this year.


1/4 eToys Inc. Santa Monica 700 100.0%

1/23 Warner Bros. Studios Burbank 100 0.1*

1/25 Miller Brewing Co. Irwindale 200 27.0

1/30 Disney Internet Group Burbank 400 100.0**

2/6 Korn/Ferry Intl. Los Angeles 60 12.0

2/19 L.A. Dye & Print Works Pico Rivera 700 100.0

3/15 Heinz Pet Products Terminal Isl. 325 62.0

3/21 Summa Industries Torrance 130 13.0

3/27 Creative Planet Los Angeles 70 3.0

* Part of a 2,000-person layoff by AOL Time Warner; percentage refers to the portion of AOL Time Warner's total workforce.

** Layoffs represent 0.33 percent of the Walt Disney Co.'s total workforce.

Sources: Companies themselves

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