Thread: 10,000 area jobs vanish

10,000 area jobs vanish
State joblessness reaches a 12-year high as suffering expands beyond real estate
By Jon Ortiz - jortiz@sacbee.com
Published 12:00 am PDT Saturday, August 16, 2008

Comments (63)

The pain is spreading.

Nearly 10,000 Sacramento-area jobs disappeared last month as California's troubled economy pushed the state's July unemployment rate to its highest point in 12 years.

Statewide joblessness grew to 7.3 percent, up from 7 percent in June, according to California Employment Development Department figures released Friday.

A year ago the state's unemployment rate stood at 5.4 percent. The statistic is adjusted for normal seasonal hiring patterns.

Meanwhile, the Sacramento area's unemployment rate jumped last month to 7.3 percent from 6.8 percent in June, the department reported.

The half-percentage-point bounce was the highest single-month increase for the region since the state started keeping regional statistics in 1990. EDD doesn't calculate seasonally adjusted unemployment for the Sacramento region.

"The story behind the job numbers is that the state's economic weakness is spilling outside of real estate," said economist Jeff Michael, director of business forecasting at the University of the Pacific in Stockton. "It's the same theme for Sacramento."

Local restaurants and retailers are struggling. Levitz Furniture Inc., Linens 'n Things Inc., Mervyns Holdings LLC, Sharper Image Corp. and several other chains with a large local and state presence have shut stores and sought bankruptcy protection this year.

Restaurant owners and operators say business at former dining hot spots such as Roseville/Rocklin, El Dorado Hills and Elk Grove has slowed. Nationally, several chain restaurant companies have filed for bankruptcy or are seeking new funding.

As a result, the leisure and hospitality industry, which includes stores and places to eat, cut 600 local jobs last month and is down 2,900 jobs from a year ago.

"Some people are still debating whether the nation is in a recession," Michael said. "For California, I think the debate is over."

California non-farm payroll employment shed 14,900 jobs in July, according to EDD figures. El Dorado, Placer, Sacramento and Yolo counties lost 9,700 payroll positions.

In the Sacramento area, government shrank by 7,300 jobs in July, largely because of trims in state and local education positions, including employees off work for the summer. Professional services lost 700 jobs; leisure and hospitality cut 600.

The rising unemployment rate and hiring pullbacks by employers take a toll on job seekers. Sacramentan Nicole Rufus, who has worked temporary jobs as a nursing assistant, said she's been looking for several weeks for a steadier job.

"I thought I had something a couple of times," Rufus said Friday as she visited the EDD office on Broadway. "Then the company had a hiring freeze."

Mike Dourgarian, a franchise president of Manpower Inc. on Arden Way in Sacramento, said his job-placement firm is hearing similar stories.

"People are just having a tough time finding a job," Dourgarian said. "There are just fewer and fewer seats available."

Unless you have a skill that's in demand. Companies are starving for workers in areas such as computer programming, green energy and nursing, Dourgarian said.

"These are great jobs with great pay," he said, "but it's the kind of work where you can't wake up one morning and say, 'Hey, today I want to be a nurse.' "

There are some glimmers of hope, experts note.

• Gasoline prices have retreated about 50 cents from June's statewide record average of $4.61 per gallon, according to AAA.

• Boosted by road and other infrastructure projects, construction gained 500 jobs in July.

• Local home sales for the first seven months of this year are up 51 percent, though prices are still falling, the Sacramento Association of Realtors reports. And the number of homes for sale is declining, which should eventually help prices settle.

"Housing is key," said Michael, the UOP economist. "When prices finally stabilize, that will remove a lot of uncertainty."

For now, however, more pain is probably on the way.

The next job report due in mid-September will show the impact of Gov. Arnold Schwarzenegger's decision to fire 10,000 part-time state workers. Schwarzenegger said he ordered the terminations to conserve the state's cash while officials haggle over closing California's $15.2 billion general fund budget deficit.

About the writer:
Call The Bee's Jon Ortiz, (916) 321-1043.

http://www.sacbee.com/103/story/1161930.html

Ours is going through the roof as well.