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December jobless rate rises in Santa Clarita, L.A. County

Economist points to 2012 as turning point in the economy’s recovery

Posted: January 18, 2013 3:13 p.m.
Updated: January 18, 2013 3:13 p.m.

Improvement in the labor market lost some ground in December as Los Angeles County and the city of Santa Clarita saw their unemployment figures rise slightly over November, numbers released Friday indicated.

The city’s jobless rate in December was 6.2 percent, up from 6 percent in November 2012, according to numbers from the state Employment Development Department.

The county saw a larger increase in unemployment when the numbers for December jumped to 10.2 percent, up from 9.8 percent in November.

Statewide, California’s unemployment rate remained unchanged at 9.8 percent in December compared to November, the EDD reported.

But nationally, the jobless rate continued to drop in December to 7.8 percent, down from 7.9 percent in November, the U.S. Bureau of Labor Statistics reported.

The economy has shown significant improvement in the past year, according to Robert Kleinhenz, chief economist at the Kyser Center for Economic Research in Los Angeles.

“The economy is moving forward,” he said. “Virtually all sectors have added jobs and will continue doing so in 2013.”

Jason Crawford, manager of economic development and marketing for Santa Clarita, said December unemployment was still the lowest it’s been since 2008.

“At 6.2 percent, we are a full point lower than we were last year at this time, meaning more of our residents are employed and hopefully working locally,” he said.

Kleinhenz said the so-called “fiscal cliff” may have dampened December employment numbers.

“The possibility of a ‘chilling effect’ on the economy in the time leading up to the fiscal cliff, discussion, all that happened during the course of fiscal cliff negotiations, and then 11th-hour passing of a solution to only part of the fiscal cliff problem gave rise to lots of uncertainty,” he said.

The economist said there was significant improvement in L.A. County’s economy in the latter half of 2012, noting the jobless rate in the county one year ago was 12 percent.

There were year-over-year job gains in most major sectors except manufacturing and government, Kleinhenz said.

The strongest sectors last year were construction, leisure and hospitality — each with job gains of 5.4 percent.

What are unaccounted for in the numbers, however, are those discouraged former job-seekers who are underemployed or have dropped out of the labor force altogether, Kleinhenz said. Counting those people could roughly double the unemployment numbers.

The economist also pointed out where the labor market is recovering at a faster clip.

While Kleinhenz pointed to Orange County as having outperformed the state and nation in recovery, the numbers released by the state’s Employment Development Department show that county had an overall higher unemployment rate — 6.8 percent — compared Santa Clarita’s 6.2 percent rate.

Cities with a more highly educated workforce fared better during the recession, Kleinhenz said.

And overall, the economy is showing steady improvement, he said.

Prior to the recession there was a lot of growth in construction, finance and real estate, Kleinhenz said.

“Those industries were very hard hit during the recession and harder hit in California than they were in the U.S. as a whole,” he said. “Those areas account for the lion’s share of the job loss we incurred.”

Taking the long view of unemployment numbers, he said the rates peaked in December 2009 when the jobless rate was 12.3 percent in California. It’s now at 9.8 percent, a drop of 2.5 percent since the height of the recession.

“Progress has been much slower than we’ve seen in previous recessions. Usually we see the economy recover in a couple years,” Kleinhenz said.

But when a recession is accompanied by financial crisis, as the nation experienced, the recovery historically takes longer, he said.

“But there was healing in the housing market and consumer spending in the latter half of 2012, and that helps contribute to a healthier economy when the consumer sector can move the whole economy forward.”




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