Labor Market Still Strong

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L.A. County’s unemployment rate edged up in December amid signs that the local labor market may have peaked.


The unemployment rate, which hit a 30-year low of 4.2 percent in November, increased to 4.5 percent in December as more people sought work in a labor market already filled to capacity, according to figures released Friday from the state Employment Development Department.


“The November rate was simply unsustainable,” said Brad Kemp, labor market consultant for the department. “That said, the unemployment rate is still very low by historical standards and the local economy is still in very good shape.”


The increase in L.A.’s unemployment rate helped drive an uptick in the statewide rate to 4.8 percent from 4.6 percent in November.


The county added nearly 11,000 jobs in December, bringing the total to 4,119,600 jobs, still 60,000 jobs short of the all-time high reached in March 1990.


However, the December job gain was less than what many analysts had expected, thanks mostly to a softer-than-anticipated retail season. The retail sector added 8,600 jobs, short of the 10,000-plus jobs analysts had been counting on. One reason was the merger of Federated and May department stores which cost the region hundreds of jobs, according to Jack Kyser, the chief economist at the Los Angeles County Economic Corp.


The information sector which includes film and television production added 2,300 jobs.


For the 2006 year, the county added 47,100 jobs, for a modest growth rate of 1.1 percent. The largest gains were in health care/social assistance (8,900 jobs), leisure/hospitality (8,700 jobs), professional and business services (8,500 jobs) and trade, transportation and utilities, up 8,300 jobs.


“These are all very robust sectors right now and they show no signs of slowing down,” Kemp said.


The biggest job losses in 2006 came in manufacturing, which dropped 6,200 jobs. However, that’s well below the losses of 13,600 jobs for 2004 and 33,600 jobs for 2003. Strong aircraft orders and specialty manufacturing helped offset losses in the rest of the sector.


Surprisingly, despite the dramatic drop in home sales throughout the region, the construction sector only experienced a drop of 1,900 jobs in 2006, with most of those losses coming among specialty trade contractors. Building construction employment, which had boomed in previous years, remained flat.


“A lot of people expected construction employment to fall off a cliff. While it has slowed, that huge drop just hasn’t happened,” Kemp said.

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