L.A. County’s unemployment rate held steady at 4.5% in July for the third month in a row, despite a huge seasonal drop in jobs in the education sector as summer break kicked in.

The state Employment Development Department reported Aug. 16 that the unemployment rate was unchanged from May and June levels. The rate has hovered between 4.5% and 4.7% for more than a year, all near record lows and indicating an economy near full employment.

The county’s 4.5% unemployment rate remained slightly higher than the 4.1% statewide average and well above the national average of 3.7%.

The unemployment rate, which is based on a monthly household survey, has remained so low in part because the county’s labor force continues to shrink. The number of people in the labor force fell by 5,000 in July to about 5.1 million; the labor force has shrunk by roughly 50,000 over the past year. That has run counter to national trends that have seen more people entering the labor force in search of higher paying jobs.

The payroll job count in Los Angeles County fell by 48,000 in July to 4.52 million, a drop of 1% from June. Almost all of this drop came from the education sector: There was a decline of 37,000 from public sector schools and 7,000 from private sector schools and colleges as summer recess took hold. The remainder of the drop came from the accommodations/food services sector, which shed 4,000 jobs in July.

The financial activities sector added the most jobs in July, rising by 2,000, almost evenly split between real estate/rental and finance/insurance.

The state EDD takes into account seasonal variations such as the decline in education employment over summer recess. For July, the agency released an adjusted payroll jobs figure showing a gain of 2,600 jobs from June; this is the figure most closely watched by economists.

For the 12-month period ending in July, employers added 63,400 jobs to their payrolls for a growth rate of 1.4% from July of last year. That’s on the high end of year-over-year job growth rates, which have hovered around 1% for the last several months.

The healthcare/social assistance sector gained the most jobs over the past year, adding 22,000 positions. Construction added 12,000 jobs and accommodation/food services added 10,000 jobs. The finance/insurance sector shed the most jobs, dropping by more than 3,000.

Education, energy, engineering/construction and infrastructure reporter Howard Fine can be reached at hfine@labusinessjournal.com. Follow him on Twitter @howardafine.

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