Los Angeles County's unemployment rate dropped slightly to 4.7 percent in April from 4.8 percent in March as more people left the labor force.
But payroll employment fell by 1,500 jobs in April to 4,056,200, a negligible drop from March but a reversal from substantial job gains in recent months, according to figures from the state Employment Development Department.
This decline may be the first sign of impact from higher fuel and basic materials costs as companies face more out-of-pocket costs, they have less money available to hire more workers.
Also, the drop was led by larger than anticipated declines in motion picture and retail trade employment, which fell by 5,500 jobs and 2,700 jobs respectively.
In the motion picture sector, a surge in television pilot production earlier in the year appears to have tapered off, according to Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. The industry has become more reliant on pilot production as a job generator as show are yanked off the air quickly if their ratings don't match expectations.
On the retail side, the impact of the consolidation among major department store chains like Robinson's May and Macy's is now translating into store closings and job losses, Kyser said.
Nonetheless, retail trade is still up from a year ago, reflecting the underlying strength of the economy. Despite a drop in housing sales, construction is still a hot sector, up 6,400 jobs in April from April 2005.
Overall, the county added 45,000 non-farm payroll jobs between April 2005 and April 2006, for a growth rate of 1.1 percent, in line with recent year-over-year performance.
Although total civilian employment in L.A. County dropped by 5,000 to 4,654,000 in April from March, the unemployment rate fell because of an even larger drop of 10,000 jobs in the county's labor force. When the labor force contracts, it's usually because fewer people are looking for work, though some of the change could be due to people moving out of the county.
"This is a case of what at first blush appears to be good news the unemployment rate dropping may not be so good after all. The key will be whether this trend of people leaving the workforce continues over the next several months," said Brad Kemp, labor market analyst with the Los Angeles office of the EDD.
But year-over-year growth in civilian employment is still a relatively robust 2 percent. In recent years, there's been a growing divergence between civilian employment (taken from a survey of households) and payroll jobs, which are culled from employer records submitted to the state. The reason: independent contractors, the self-employed and other forms of "off-the-books" employment are flourishing in L.A.
Despite the slight drop in April, L.A.'s unemployment rate is still higher than surrounding counties, especially Orange County, which posted a 3.2 percent unemployment rate.
Statewide, the unemployment rate inched up to 4.9 percent in April from 4.8 percent in March, but was still lower than the 5.4 percent recorded in April 2005. The number of payroll jobs was virtually flat April compared to March, declining by 2,600 jobs to 14,951,100, or less than .02 percent. That's still 1.5 percent above the April 2005 level.
At the local level, the city of Los Angeles posted an unemployment rate of 5.1 percent, down from 5.4 percent in March. Long Beach recorded a rate of 5.2 percent, down from 5.5 percent in March.
The lowest unemployment rate in L.A. County cities with more than 100,000 population was Torrance at 2.1 percent, followed by Santa Clarita at 2.6 percent. The highest unemployment rate among larger cities was Compton at 7.7 percent, followed by Lancaster at 6.2 percent.
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