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Wednesday, Sep 27, 2023




Senior Reporter

California’s lagging indicator: Los Angeles.

The county continues to bring up the rear in job growth, according to revised numbers recently released by the state Employment Development Department.

While the numbers were the best this decade, they were well behind the state as a whole, raising questions in some economic circles about how strong the current expansion really is.

The number of jobs at business establishments in Los Angeles County grew by 1.5 percent in 1996, compared with 1995, based upon annual averages, according to the EDD.

In 1996, an annual average of 3.80 million workers had jobs in the county, up from 3.75 million in 1995.

“(This) year is not going to be any better than 1996. Overall, you might see 1.5 percent job growth,” said Mark Schniepp, director of the Business Forecasting Project at UC Santa Barbara. “(Los Angeles) is still a high-cost place to do business. That hasn’t changed.”

Indeed, Los Angeles still has lots of ground to cover before it recovers the level of employment reached in 1989, with an annual average of 4.11 million jobs.

Other economists found good news behind the numbers in particular, growth in the once-dormant manufacturing sector.

“The growth in manufacturing jobs is very heartening,” said Jack Kyser, economist with the Los Angeles County Economic Development Corp. “It’s across the board in aerospace, in apparel, all types.”

Bolstered by factories and businesses in other sectors, establishments in the county should increase job rolls by a little more than 2 percent this year, Kyser projected.

But L.A. continues to be plagued by slower job growth among retailers, wholesalers and the financial service industry.

“We know that retail sales have been going up, but employment in the industry is going down. That’s due to consolidation,” said Tom Lieser, associate director of the UCLA Business Forecasting Project.

The looming merger of Great Western Financial Corp. portends additional job losses in the financial institutions sector, which already has been battered in recent months by mergers.

Overall, economists expect local job growth to maintain its current slow pace.

“Our forecast is for 1.8 percent growth for 1997. I still believe that number is realistic, based upon what happened in 1996,” said Esmael Adibi, director of the Center of Economic Research at Chapman College in Orange.

International trade, general national economic growth and manufacturing strength all auger well for the Southern California economy, said Adibi.

Other sectors showing job growth include legal services and entertainment, said Adibi. “So we see 1997 will actually be a little better than 1996.”

One possible monkey wrench: the Federal Reserve Board may decide to raise interest rates. “That would dampen real economic growth,” said Adibi.

At current rates of expansion, the county might reach 1989’s level of employment sometime early in the next decade if another recession doesn’t intrude, said Kyser and other economists.

“We still have about 300,000 jobs to make up,” Kyser said.

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