L.A. County's unemployment rate fell to a seasonally adjusted 4.8 percent in July from 4.9 percent in June, though it was slightly above the 4.6 percent recorded in July 2006, according to figures released Friday by the California Employment Development Department. The main reason for the drop was a smaller-than-expected increase in the number of people looking for work.

Statewide, the seasonally adjusted unemployment rate was 5.3 percent in July, up from 5.2 percent in June and from 4.8 percent in July 2006.

Meanwhile, total nonfarm payroll jobs in L.A. County plunged by 37,000 in July to 4,105,900, a drop of nearly 1 percent from June levels. More than two-thirds of this decline was due to teachers on summer break. According to Olga Hernandez, an EDD labor market consultant in Los Angeles, teachers are considered not working on a week-by-week basis, even if they expect to continue to be on school payrolls in the fall. (The unemployment survey of households takes this into account in its seasonal adjustment, which helps explain the drop in the L.A. figure in July).

On the plus side, trade, transportation and utilities posted the largest employment gain in July from June, as 1,700 jobs were added in the transportation sector to handle the seasonal summer surge in port traffic as imports arrive for the holiday season.

Statewide, nonfarm payrolls dropped by 8,600 jobs for a total of 15,258,100. This continues several months of sluggish payroll job performance, due in large part to the slowdown in the housing sector. Year-over-year, the state has added 173,000 jobs, for a relatively modest growth rate of 1.1 percent.

Over the past 12 months, Los Angeles County nonfarm employment grew by 36,900 jobs, or 0.9 percent. That's a slower rate of growth than the region has seen in recent months, due in part to the weakness in the housing market and related industries. The biggest job-gainers over the past year were health care and social assistance (up 9,600 jobs) and educational services (up 5,000).

One unexpected occurrence was the flattening of growth in the hitherto booming business and professional services sector, which saw a drop of 900 jobs in July (to 605,700) from June and has seen its year-over-year growth rate slow to 1.6 percent from well over 2 percent in previous months. There were slight declines in July across the board, including legal, accounting and design services.

"We're going to watch this and see if this develops into a trend or is just a random fluctuation," Hernandez said.

Also somewhat puzzling is the continued resilience of the construction sector despite more than 18 months of slowing in the housing markets. Total construction employment was virtually unchanged in July from June's 156,000 jobs; over the last 12 months, construction employment has declined by only 3,000 jobs, with almost all of those losses coming among specialty trade contractors. A boom in mega-projects both public and private is credited with keeping the construction job market afloat.

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