California’s unemployment rate jumped to 9.3 percent in December, capping a troublesome year of massive job losses and a housing slump that has struck most of the country.
The December unemployment rate was the highest in 15 years, highlighting the severity of the economic slowdown, the California Employment Development Department (EDD) said. In the Los Angeles County, the jobless rate was 9.5 percent.
The department said the rising unemployment rates were due to lackluster holiday sales, continued home value declines and a heightened tempo of layoffs at companies across all sectors of the economy.
Excluding farmworkers, California lost 78,200 jobs in December as employers sliced payrolls to deal with the slowing economy.
California’s unemployment rate hasn’t been at this level since January 1994, when the state was coming out of its recession in the early part of that decade, said Stephen Levy, senior economist for the Center for Continuing Study of the California Economy.
Nationwide, the unemployment rate was 7.2 percent in December, compared with 6.7 percent in the previous month, said the department.
California has for some time been contending with one of the worst housing markets in the nation, with some areas posting some of the nation’s highest foreclosure rates, and its effects have spilled over into the state’s broader economy.
Sharply lower consumer spending in recent months has worsened those effects, forcing layoffs across industries, Roberts said.
“We’re starting to see a big impact in durable goods manufacturing, in trade, wholesale and retail, and now leisure and hospitality, which is restaurants and hotels,” Roberts said.
State officials reported a loss of 78,200 nonfarm payroll jobs in December from November and a fall of 257,400 from December 2007, marking a 1.7 percent drop in California’s nonfarm payrolls.
The construction sector, hit hard by the housing slump and foreclosures, accounted for the most job cuts over the past year– 92,600 positions, a 10.8 percent annual drop.
California labor leaders said the skyrocketing job losses should persuade Gov. Arnold Schwarzenegger and state lawmakers to expand the state’s unemployment insurance system and provide benefits to seasonal and new workers. That would make California eligible for an additional $900 million as part of a federal economic stimulus bill Congress is considering, said Art Pulaski, executive secretary-treasurer of the California Labor Federation.
California’s dwindling funds to assist its unemployed is one of many financial issues weighing on Schwarzenegger and lawmakers as they negotiate rival plans to balance the state’s books.
California’s budget faces a shortfall of more than $40 billion over the rest of the current fiscal year and its next fiscal year.
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