O.C. Job Outlook Remains Bright

Orange County’s job market remained buoyant in January despite the usual seasonal uptick in unemployment after the holidays.

The county jobless rate rose to 3.7% in January from 3.1% in December, but remained a full percentage point lower than in January 1996, the state Employment Development Department reported.

“To be below 4% in January, which is a seasonally high unemployment month, is exceedingly low” because of the typical slowdown in the retail and construction industries, said Ted Gibson, chief economist with the state Department of Finance.

More significant, analysts said, revised figures showed Orange County’s employment growth last year was even more prodigious than expected, with 32,500 jobs created. That represents a 2.8% increase, the best so far this decade and even slightly better than economists’ optimistic forecasts.

“Orange County is the high-tech, information-age center of Southern California, and it’s an engine for the state,” said Stephen Levy, director of the Center for the Continuing Study of the California Economy in Palo Alto.

Orange County’s jobless rate was the fourth lowest in California, and the lowest in Southern California, making it one of the brightest stars in a statewide economy that has also outperformed earlier expectations.

California employers added a whopping 379,300 jobs last year, 57,000 more than previously estimated, the Employment Development Department said.

The state’s employment growth was the most since 1988. The report underscored the significance of small high-tech firms that have sprouted since the recession, mainly in Northern California, but also in Orange County and places like the San Gabriel Valley.

Indeed, most of the 57,000 additional jobs picked up in the once-a-year revision came in high-tech manufacturing and services, including start-ups and other nimble businesses that are difficult to track on a month-to-month basis.

“They don’t have time to fill out [monthly] forms, they’re in Internet time,” quipped Gibson, the state economist. Gibson said the revised job figures were higher than he had expected.

“It really is further confirmation that the state’s economy is in a good solid recovery,” he said.

The pace of job formation in the state continued into January, despite the wet weather that severely cut farm payrolls. California’s unemployment rate held steady in January at 6.8%.

Although higher than the U.S. unemployment figure of 5.4%, analysts noted that California is now clearly the nation’s front-runner in terms of job growth.

“The [California] economy is doing fabulous and is leading the nation in a definitive way,” said Mark Zandi, an economist at Financial Regional Associates, an economic consulting house in West Chester, Pa.

But Los Angeles County had much less to cheer about. Although the county’s jobless rate dipped in January to 7.4%, from 7.8% the previous month, data revisions showed that employment expansion since early 1995 has been much smaller than previously thought.

In fact, analysts reported Friday that they had overcounted a startling 46,600 jobs for Los Angeles County, mostly in the wholesale and retail trade, and the banking industry. As a result, employment in the county expanded by 1.8% last year, not 2.5% as previously estimated. Statewide, payrolls grew by a robust 2.9% last year, according to the revised figures.

Orange County’s unemployment rate, unlike the statewide and Los Angeles County figures, is not adjusted for seasonal fluctuations.

The total number of nonfarm jobs in Orange County reached 1.19 million in January, up nearly 33,000 from a year earlier. All major industry sectors posted year-to-year increases, led by services, manufacturing and wholesale trade.

Government and the construction, finance, insurance and real estate industries also added jobs in the past year. High-tech manufacturing alone boosted employment by 1,700 jobs since January 1996.

Economists generally agree that Orange County is on track for another strong year in employment growth.

“I’d expect that the Orange County economy, given the widespread positive outlook of business leaders as well as consumers, will continue to gain jobs,” said Anil Puri, director of Cal State Fullerton’s Institute for Economic and Environmental Studies.

In fact, Puri said, the local economy is so bright that he plans to revise upward his earlier prediction that payroll employment in the county will grow by another 2.4% this year.

Gibson said the county could generate 35,000 to 40,000 new jobs in 1997, surpassing earlier projections.

At some point, he warned, the county’s continued low unemployment could stifle business growth. “It suggests that, if anything, the economy in Orange County might be held back by worker shortages.”

Still, Gibson said, “It’s hard to be upset about an economy that’s yielding that kind of unemployment rate.”

The Inland Empire also gained more jobs last year than previously estimated. The January jobless rate for Riverside and San Bernardino counties shot up to 7.4% from 6.3% in December. Even so, job formation in those two counties is now running ahead of the statewide pace.

January Jobless

Orange County’s January unemployment rate, 3.7%, was a full percentage point lower than last January, but slightly higher than December’s 3.1%. The small rise reflects a seasonal pattern of retailers reducing staffs after the holidays. Monthly unemployment rate, unadjusted for seasonal factors:

1996

Jan.: 4.7%

Feb.: 4.5%

March: 4.2%

April: 4.1%

May: 4.1%

June: 4.3%

July: 4.5%

Aug.: 4.2%

Sept.: 4.1%

Oct.: 3.8%

Nov.: 3.6%

Dec.: 3.1%

1997

Jan.: 3.7%

Source: California Employment Development Department

Researched by JANICE L. JONES / Los Angeles Times