State Adds 36,300 Jobs in Broad-Based Boom

California’s economic engine continued to pick up steam in February, as employers added another 36,300 new jobs, pushing the unemployment rate to its lowest level in nearly eight years, the state reported Friday.

Job growth was broad-based, with all major industry sectors, including manufacturing, services and retailing, boosting payrolls. The seasonally adjusted unemployment rate fell from January’s revised 6.0%, to 5.8%, its lowest level since August 1990, the state Employment Development Department said.

In February 1997, the state unemployment rate was 6.6%.

Economists said they were somewhat startled by the economy’s resilience in the face of El Nino’s storms and the Asian financial crisis.

“California is right up on top,” said Steve Cochrane, an economist at Regional Financial Associates in West Chester, Pa. “Everything seems to be coming together for California right now.”

Even the construction industry added workers last month as the pall of El Nino failed to dampen that industry’s comeback.

Although California’s unemployment rate remains higher than the 4.6% rate for the nation as a whole, it has been closing the gap at a surprisingly fast clip. In the last year, half a million new jobs have been added in the state, a robust 3.8% gain.

“This is a very positive piece of news,” said Tom Leiser, an economist at UCLA’s Business Forecasting Project. “We’re clearly on a stronger trend than the national labor market.”

The good news extended into Los Angeles County, where the unemployment rate fell to a seasonally adjusted 5.8% from a revised 6.1% in January and 7.2% a year earlier. The last time the county’s unemployment rate was equal to or below that of the state was in 1995.

Total employment in the county has expanded by more than 100,000 in the last year, with strong gains recorded in construction (up 4,300), manufacturing (23,100), aerospace (1,900), apparel (7,900), transportation (6,100), retail (13,700) and services (42,800).

“It seems the momentum of growth is swinging more and more to the south,” said Jack Kyser, chief economist at the Los Angeles Economic Development Corp. He noted that Los Angeles County has added more jobs in the last year than it did during each of the boom years in the mid- to late-1980s.

But economists also sounded a few cautionary notes about Los Angeles. Clouds continue to hang over the motion picture sector, a major employer whose explosive growth has helped fuel the county’s rebound in the last few years.

Though the industry added workers from January to February, it remained at 1,600 jobs, or 1.1%, behind the year-ago level.

Kyser said the declining motion picture employment could be due to a shortage of sound stages and what some in the industry believe is a dearth of quality films. Although box-office receipts are high, they’re being generated by a few large movies like “Titanic.”

Stephen Levy, director of the Center for Continuing Study of the California Economy, cautioned against making too much of the decline because figures on motion picture jobs are notoriously unreliable, given the piecemeal nature of the business.

Still, economist Cochrane believes the overall unemployment rate and job growth numbers for the county “might be showing a little too rosy a picture” given that home price appreciation and income growth has lagged other parts of Southern California.

The February report followed last month’s news that the state created more than 100,000 more jobs in 1997 than previously estimated. In releasing its annual revisions of jobs data based on a more comprehensive survey of employers, the EDD found that nonfarm employment in the state jumped by 3.6% last year.

The surprise is that the strong growth has continued so far this year, despite predictions that the economy would begin to slow because of the turmoil in Asia.

And even when the effects of Asia’s woes do begin to surface, the damage is expected to be limited because of the continuing strength in the national economy, where most of California’s goods are sold, and because of a solid base of industries here.

“Both Southern California and the state have very good economic bases, very good sets of lead industries,” Levy said. “We’d expect them to continue to outpace the nation.”

Other counties also showed improvement last month.

Orange County remained one of the state’s hottest job markets. The unemployment rate sank to 3.0% from 3.1% in January, as employers added another 7,800 jobs. In Riverside County, the jobless rate fell to 6.6% from 7.0%, and San Bernardino County’s rate declined to 5.8% from 6.1% in January. Ventura County’s rate was down to 6.0% from 6.4%. Those figures are not seasonally adjusted.

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Unemployment Drops

California’s unemployment rate fell to 5.8% in February. Monthly unemployment trend, seasonally adjusted.

Feb., 1998: 5.8%

Source: California Employment Development Department