The Economic Data Global Express (e-EDGE)

v.4 n.42       Released Oct. 16, 2000 
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

LOCAL, STATE UNEMPLOYMENT RATES DOWN IN SEPTEMBER

     California's headline unemployment rate was 4.8% in September, down from 5.1% in August and July and 0.2% points below September 1999.  (These figures are adjusted for normal seasonal variation.)  September's rate matched that of April and January 2000 and was just above February's low rate of 4.6%.
     Jobless rates at the county level are not seasonally adjusted.  Most counties normally register lower unemployment in September than in August as local teachers return for the fall semester.  This year was no exception.  Los Angeles County's unemployment rate fell to 5.5% in September from 5.8% in August and was down by 0.4% points compared to September 1999. Orange County's jobless rate was 2.5% in September, lowest in Southern California, and down by 0.3% points over the month and by 0.2% points over the year.  San Bernardino and Ventura counties' rates both fell in September, to 4.7% and 5.3% respectively, but were even with last year.  At 6.1%, Riverside County's jobless rate was high for the region last month, down by 0.8% points month-to-month, but up by 0.2% points year-over-year.  San Diego's unemployment rate was 3.0% last month, down from 3.4% in August and about even with September 1999.
     The jobless rate in the 8-county Bay Area fell to 2.3% in September from 2.7% in August.  At an incredible 1.7%, San Jose continued to lead that region, while San Francisco's unemployment rate registered a low 2.1%.  Compared to last year, San Francisco's unemployment rate was down by 0.2 points while San Jose's rate dropped by a full 1.1%.  Labor markets are also quite tight in the East Bay: Alameda/Contra Costa counties' jobless rate dropped to 2.8% in September, down from 3.1% in September 1999.  Unemployment rates are higher in much of the San Joaquin Valley, with Kern and Fresno counties for example registering 9.0% and 11.3% respectively last month.  The Sacramento area continues to outpace the rest of the Valley.  Metropolitan Sacramento's jobless rate dropped to 3.8% in September.  (Nancy D. Sidhu)
Unemployment Rate:
The county numbers are not seasonally adjusted:
     L.A. County:  5.5% (9/00), 5.8% (8/00), 5.9% (9/99)
     Orange County:  2.5% (9/00), 2.8% (8/00), 2.7% (9/99)
     Riverside/San Bernardino: 5.4% (9/00), 6.0% (8/00), 5.3% (9/99)
     Ventura County: 5.3% (9/00), 5.8% (8/00), 5.3% (9/99)
PR: http://www.edd.ca.gov/nwsrel10.htm
Table: http://www.calmis.cahwnet.gov/file/lfmonth/cal1$pr.txt
 

CALIFORNIA & LOCAL NONFARM EMPLOYMENT

     Nonfarm employment in California and Southern California continued to push forward to new record levels in September.  For the state, the job total was up over the year by 3.0% or 426,600.  This came despite a steep drop in the manufacturing sector, reflecting losses in aerospace (-11,000) and food products (-7,000).  However, electronics manufacturing continued its rebound.  Services posted the largest year-to-year gain, of 185,700 jobs.  Some 29,800 of these were in computer programming and related services.
     Los Angeles County's economy had a perkier tone in September, with growth of 2.1% or 86,200 jobs.  Manufacturing, however, continued its slide, dropping 12,900 jobs over the year.  Services generated 44,800 new jobs.  In the movie biz, employment in production activities eased down 900 jobs from August (the latter was the recent high) to 143,400.  Motion picture employment was up over the year by 11,100 jobs, as the studios rush to stockpile films for next year.  As to strike activity in the County, the SAG action against commercial producers doesn't register.  The MTA strike started too late to show up in the September data, and the County worker's strike is on hold.
     September nonfarm employment in Orange County posted a gain of 2.8% or 38,000 jobs, in line with recent trends.  The County's manufacturing sector continued to expand, adding 4,500 jobs over the year.  However, nonfarm job growth in the Riverside-San Bernardino area continued to moderate in September, with an increase of 4.1% or 38,500 jobs.  Its manufacturing sector added 5,400 jobs.
     More visible evidence of slowing in employment growth is found in San Diego and Ventura counties.  The formers nonfarm job growth eased to 1.8% in September, or 20,400.  Its manufacturing sector continued to post steady growth, with an increase of 2,200 jobs during the month.  Ventura County's growth came in at 1.7% or 4,500 jobs in September.  During 2000's first quarter, growth rates had been well over 4%.  Ventura's manufacturing sector managed to post a moderate gain over the year.  In fact, in Southern California, there is the manufacturing "dichotomy," with Los Angeles County posting losses over the year, while the other 4 metro areas record gains.
     In the Bay Area, the San Francisco metro area posted September nonfarm job gains of 2.2% or 22,900 over the year.  The San Jose area also came in at 2.2% or 21,200 jobs.  (Jack Kyser)
 

MID EAST UNREST HITS NERVE CENTER OF ECONOMY AND MARKETS

     Last Thursday will likely "live in infamy" (a phrase used by President Franklin D. Roosevelt to describe the Pearl Harbor attack on December 7th, 1941).  It will be remembered as the day when: (1) a terrorist attack was launched against a U.S. Navy ship anchored off Yemen, resulting in numerous deaths and injuries to American military personnel;  (2) the outbreak of serious violence and military hostilities between Israel and Palestine; and (3 oil prices spiked to over $36/bbl.  Compounding these international developments was the announcement by the large retailer Home Depot that its earnings for the second half of this year would be below expectations.  This latter announcement triggered massive selling in U.S. stock markets and, coupled with the international situation in the Middle East, resulted in a decline in the Dow Jones Industrial Average of 379 points (3.6%) and NASDAQ of 94 points (3.0%).  By the end of trading on Friday, NASDAQ had recovered more than its prior day's losses (up 242 points) and the DJIA was up 157 points.
     So, why are we so nervous about unrest in the Middle East?  The risks come from several sources.  First, consumers and investors do not like abrupt changes in the economic, political or financial outlooks--shocks such as last week's are devastating to confidence.  Second, the U.S. and global economies are likely able to survive $40+/bbl oil price over a 6-to-12 month period, without a recession, but not a prolonged supply disruption.  Third, the breakdown of the Israel/PLO peace process and outbreak of overt military action have placed Saudi Arabia in a difficult position--financially backing the PLO ("Arab/Moslem alliance") in a geopolitical situation characterized by a tight U.S./Israeli historic alliance.
     Relief from high oil prices over the next six (winter) months can come only from Saudi Arabia raising production--a strategy that would antagonize extremist elements in the Middle East.  If U.S. pressure fails to get Saudi Arabia to raise production and to influence OPEC to do the same, we will face current highs in oil prices or worse for a longer time.  How this will all play out in the months ahead is subject to complex political and economic forces and responses by several nations, but the risk of an oil supply shock or a military shock has been raised.  The "soft-landing" versus "hard-landing" debate will now escalate.  Global financial markets could be more volatile in the weeks ahead.  (Ken Ackbarali)
 

BAD NEWS ON THE INFLATION FRONT

     The Producer Price Index (PPI) for finished goods rose by 0.9% in September, after a 0.2% decline in August.  The main culprit is the 3.7% increase in energy prices.  The 0.4% increase in food and 0.3% increase in the core prices provided no relief either.  The PPI for intermediate goods rose 0.7% (food: +1.1%, energy: +4.1%, core: +0.0%).  The PPI for crude goods rose 5.3% (food: +3.9%, energy: +8.1%, core: +0.3%).  Sky-high oil prices were to blame and there's little relief in sight.  In October, Saudi Arabia began increasing its oil production, but the impact seems to be quite limited.  The release of oil from our Strategic Petroleum Reserve may not do much for consumers either.  With the tension in the Middle East rising, some of us are comparing this year to the early 1970s when the Middle East had its last big war before the Gulf War.  The rising energy prices seemed to be trickling into the core prices.  The Federal Reserve has a big challenge on its hands.  (George Huang)
PR: http://www.bls.gov/news.release/ppi.nr0.htm
 

RETAIL SALES UP AGAIN IN SEPTEMBER

U.S. retail sales rose by 0.9% during September, more than expected and making up for August's lackluster increase of 0.1%.  The swing in sales by automobile dealers and gasoline stations accounted for most of the month-to-month improvement.  Their sales rose by 1.4% and 2.1% in September respectively, in contrast to declines of 0.4% and 1.5% in August.  (The marked reversal of gasoline sales was due to changing price trends last month.)  Among other types of retailers, significantly higher sales were registered by restaurants, up 1.0% in September, and by drug stores, up 1.1%.  On the other hand, sales of building materials dealers dropped by 0.7%.  Nonetheless, these figures suggest that consumer spending remains a steady foundation for the U.S. economy in the near term.  (Nancy D. Sidhu)
PR: http://www.census.gov/svsd/www/retail.html

 

QUICK STATS:

* BLS: US export prices for 9/00: +0.5% (8/00: -0.3%)
* BLS: US import prices for 9/00: +1.5% (8/00: +0.2%)
* BLS: US Produce Price Index for finished goods for 9/00: +0.9% (8/00: -0.2%)
* Cal EDD: California unemployment rate for 9/00: 4.8% (8/00: 5.1%)
* Cal EDD: California nonfarm employment for 9/00: +73,300 (8/00: +28,300)
* Cal EDD: LA County unemployment rate for 9/00: 5.3% (8/00: 5.5%)
* Cal EDD: LA County nonfarm employment for 9/00: +40,600 (8/00: -7,100)
* Census: US retail sales for 9/00: +0.9% (8/00: +0.1%)
* Census: US wholesale trade for 8/00: +0.3% (7/00: -0.3%)
* Census: US wholesale inventories for 8/00: +0.6% (7/00: +0.3%)

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