L.A. County Unemployment Rate Hits Record High

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Despite signs of a stabilizing economy, Los Angeles County’s unemployment rate surged to modern record high of 12.3 percent in August as state and local government budget cuts took their toll.

The rate was up from 11.9 percent in July and well above the 8.5 percent figure of August 2008.

The largest employment declines came in state and local government, which shed 9,000 jobs in August, the first significant drop since the recession began. The county also hemorrhaged manufacturing jobs, losing 4,200 just in the last month and 39,000 jobs over the past year.

Overall, non-farm payroll employment fell 10,000 jobs in August to 3,863,000. The more closely-watched year-over-year tally of payroll jobs showed the county losing 166,000 jobs over the last 12 months, a 4 percent drop. That’s slightly better than the 4.3 percent year-over-year drop measured in July, which might seem to indicate some slowdown in job losses.

However, the jobs picture is deteriorating more rapidly in the household survey data, which includes people in the informal workforce. More than 620,000 county residents said they were out of work last month in the survey, a nearly 50 percent jump over the past year. That helped push the unemployment rate past the 12 percent mark for the first time since World War II.

Unemployment rates tend to be a lagging indicator of economic performance. That’s especially true now, when companies are reluctant to hire even though many economists are saying the recession has probably ended, pointing to stabilizing home prices and growing exports.

But California’s recovery is likely to be hampered by huge deficits in the state and local government budgets, which portends tens of thousands more cuts in public payrolls in coming months.

Statewide, the unemployment rate was 12.2 percent in August, up from 11.9 percent in July and 7.6 percent a year ago. The nationwide unemployment rate stood at 9.7 percent in August.

The picture is considerably worse in the county’s two largest cities, Los Angeles and Long Beach, where the jobless rate hit a stunning 13.8 percent in each. The City of Commerce had the highest unemployment rate in the county, at 22 percent, followed closely by Compton at 21 percent.

One of the few bright spots was the entertainment industry, which gained 7,000 jobs in August from July as fall television production kicked into full gear, though employment is still down slightly from a year ago. Healthcare was the only major sector to show year-over-year job gains, with a relatively modest jump of 5,000 jobs, or 1 percent.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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