July Jobless Rate Highest in 11 Years

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The housing and mortgage finance meltdown hit the L.A. economy with full force in July as the county’s unemployment rate shot up to 7.5 percent, its highest level in 11 years and well above the 4.9 percent rate of a year ago, according to state figures released Friday.

In another dose of bad news, the state Employment Development Department figures showed the county shed 39,600 non-farm payroll jobs in July from June levels, led by sharp seasonal drop in education and job losses in the entertainment sector.

The July total of 4,075,000 jobs in L.A. County also was down 15,100, or 0.4 percent, from a year ago, led by a loss of 10,700 construction jobs and similar drops in retail trade and financial activities.

“It’s taken more than a year, but we’re finally seeing the full impact of the housing and related mortgage finance slowdown,” said Eduardo Martinez, economist with the Los Angeles County Economic Development Corp.

Statewide, the unemployment rate rose to 7.3 percent in July, up from 7 percent in June and 5.4 percent a year ago. Year-over-year payroll job losses, though, remain rather modest at 14,900 out of a total workforce 15.1 million.

Behind the L.A. County unemployment figures is a rapidly deteriorating jobs picture. According to the household survey used to measure unemployment, a whopping 85,000 fewer county residents reported they were employed in July than a year ago, a drop of nearly 2 percent.

The ranks of the unemployed swelled even more, jumping 46 percent over the last 12 months to 402,300 as more people entered the local job market in search of work.

“These are truly amazing figures. We all expected the unemployment rate to be high, but not as high as this,” said Christa Shapiro, Southern California regional vice president for Adecco Staffing, a Switzerland-based staffing company.

These figures continued the trend of the number of residents reporting they were out of work far outstripping the number of lost company payroll jobs, indicating that the job losses have been far more severe among the ranks of independent contractors and people working for cash under the table, especially in the construction sector.

The LAEDC’s Martinez said the impact of the housing and mortgage meltdowns was being felt most in three areas: construction, financial activities including rounds of layoffs from mortgage lenders Countrywide Financial Corp. and IndyMac Bancorp and retail, especially at home improvement stores. The financial service sector alone has lost 8,800 jobs in the last year.

Adding to the misery has been the sustained surge in fuel prices, which, while down somewhat from their peak in June and July, are still 30 percent to 40 percent higher than a year ago. One direct impact: motor vehicle and parts dealers, which have shed 2,000 payroll jobs over the past 12 months.

Another factor in the weak job showing: the turmoil in the entertainment industry. In anticipation of a possible actors strike this summer, studios rushed feature film production schedules, leading to a lull in work last month that showed up as a loss of 2,900 payroll jobs from June.

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