State Economy Steams Along; Jobless Rate at 7-Year Low

California’s economy continued its march down the comeback trail, adding about 26,000 jobs in July across most industries and slicing the state’s unemployment rate to a seven-year low of 6.1% from a revised 6.3% in June, officials said Friday.

In Orange County, where economists say the local economy is leading Southern California’s recovery, the July rate--which isn’t adjusted for seasonal factors like routine summer unemployment for teachers--rose slightly to 3.6% from 3.4% in June. It was the lowest July jobless rate for the county since the pre-recession peak in 1989.

Economists generally consider anything below 5% to constitute virtual full employment.

Even with 10,000 teachers temporarily joining the ranks of the jobless, Orange County’s total employment was up 37,000 from a year earlier, with strong gains in almost all sectors.

Total employment in the county rose to 1.21 million from just under 1.18 million a year ago. At the current pace, Orange County employment will increase by more than 2% for the year, a gain that economists at local research centers at Chapman University and Cal State Fullerton say is strong enough to sustain economic growth through the end of the decade.

“It was a very good month for the state again,” said Ted Gibson, economist for the state Department of Finance. California is on track to add nearly 400,000 jobs this year and to see the unemployment rate dip below 6% in the fall, he said.

July’s seasonally adjusted statewide unemployment rate was the lowest since September 1990, according to the California Economic Development Department.

The U.S. unemployment rate dropped to 4.8% in July from 5.0% in June.

For the state, July was also the 21st consecutive month in which payroll employment hit a record high, reaching 13,154,500 jobs. California has added 1.13 million jobs since May 1993, the lowest point of the state’s recession.

Los Angeles County, which had struggled to join the expansion, enjoyed another strong month, posting a seasonally adjusted jobless rate of 6.6%, down from 6.9% the month before.

Economists were encouraged by the broad range of industries that are now participating in the jobs party.

“Nearly every major sector of the economy gained jobs in this report,” said Tom Lieser, associate director of the UCLA Anderson Business Forecast.

Only nondurable-goods manufacturing lost ground in July, down 4,100 jobs, but most of that was due to the highly seasonal food-processing sector.

Most of the job growth came from the services sector, which added 13,600 jobs during the month, primarily in business services.

Construction employment rose by 5,900 jobs in July, and an additional 2,000 jobs were tallied in finance, insurance and real estate.

Manufacturing created 1,900 jobs during the month. Retail and wholesale trade added 1,700 jobs.

Because of summer vacation, a seasonal decline continued in private educational services.

Since July 1996, nonfarm payroll employment in California has grown by 361,500 jobs, up 2.8%. In July 1996, California’s unemployment rate was 7.1%.

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July Unemployment

Orange County’s unemployment rate edged up in July, but the increase is typical for summer, when school teachers are unemployed. The 3.6% figure is the lowest for July since 1989. Orange County unemployment rate trend (not seasonally adjusted):

1996

July: 4.5%

1997

July: 3.6

July trend

1989: 3.50

1997: 3.60

Source: California Employment Development Department