Home > The Economy > Down but not Out in Los Angeles, where unemployment is the worst in the state of California

Down but not Out in Los Angeles, where unemployment is the worst in the state of California

http://www.latimes.com/business/la-fi-cal-jobs17-2009oct17,0,5039294.story?track=rss

EXCERPTS:

A separate survey of joblessness showed that California’s unemployment rate was 12.2% in September, down from a revised 12.3% in August. But that decline wasn’t a reflection of a stronger job market. The rate fell only because thousands of jobless Californians gave up searching for work last month and were no longer counted as unemployed.

“It is discouraging,” said Esmael Adibi, an economist at Chapman University. “We want to see job losses go down and the pace slow down, but we didn’t see it.”

The state’s unemployment rate has climbed dramatically over the last year, up from 7.8% in September 2008. It’s also significantly higher than the national rate of 9.7%….

The Bay Area also stands to benefit from growing government and private investments in alternative energy and medical records technology, said Stephen Levy, an economist with the Center for Continuing Study of the California Economy….

“It’s certainly easier up north, with the number of venture capital funds,” he said. “And in L.A. the tech scene’s been tough of late.”

That’s a reversal from earlier in the decade, when thousands left the Bay Area for Los Angeles and San Diego after the dot-com bust. Diversification was the key to Southern California’s resilience, with its broad mix of industries including construction, manufacturing, international trade, tourism and entertainment.

The trouble is that none of those sectors is doing well at present.

Los Angeles County’s unemployment rate soared to 12.7% in September, up from 12.2% in August. Industries including leisure and hospitality, manufacturing and construction shed jobs over the month. So did the county’s high-paying information sector, which includes motion picture and sound recording as well as publishing. It lost 2,800 jobs in September and 19,000 over the last year partly because of studio cutbacks and productions’ leaving for cheaper locales….

Although foreclosures are spread throughout the state, Southern California has seen a sharper drop in home values than the Bay Area, dragged down by steep declines in San Bernardino and Riverside counties. The Southland’s median home price was $275,000 in September, down 10.9% from September 2008, according to data released Thursday by MDA DataQuick. The Bay Area median declined 8.8% over the same period to $365,000.

Although unemployment rose in Los Angeles County, jobless rates in nearby counties declined. Orange County’s rate was 9.4% in September, down from a revised 9.8% in August. Hard-hit Riverside and San Bernardino counties posted a rate of 14.2%, down from 14.6%.

Ventura County’s unemployment rate was 11%, down from a revised 11.3% in August. San Diego’s sank to 10.2% from 10.6%.

All five metro divisions in the Bay Area saw their unemployment rates decrease from August. The jobless rates in Napa County, at 8.7%, and the San Francisco-San Mateo-Redwood City Metro Division, at 9.2%, are among the lowest in the state.

Although prospects differ for the state’s two biggest metropolitan areas, the job numbers indicate to economist Christopher Thornberg that California has reached the bottom of the downward spiral that started last year.

“We’re starting to see stability in the labor market,” he said. “The free fall has come to an end.”

But it still might feel like a free fall for the state’s 2.2 million unemployed, wherever they reside.

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