The Economic Data Global Express (e-EDGE)

v.5 n.3       Released Jan. 16, 2001
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

LOCAL UNEMPLOYMENT DROPPED AGAIN IN DECEMBER

     California's headline unemployment rate fell to 4.6% in December from 4.8% in November and 5.0% in December 1999.  December's rate matched last February as the lowest jobless rate in the past 30 years.  The state's average rate for all of 2000 was 4.9%, the lowest since 1969.  (These figures are all adjusted for normal seasonal variation.)
     Jobless rates at the county level are not seasonally adjusted.  The usual seasonal pattern calls for the number of unemployed, and the jobless rate, to drop in December as retailers staff up for the holiday shopping crush.  All of Southern California's counties ran true to form last month.  Los Angeles County's unemployment rate dropped to 4.6%, its lowest level in at least 20 years and the first month below 5.0% since the economic boom of the late 1980's.  December's rate was down by 0.7 percentage points from December 1999.  Orange County's jobless rate was 2.0% last month, a record for the county, the lowest rate in Southern California, and 4th lowest in the state.  OC's jobless rate fell by 0.2 percentage points over the year.  Riverside and San Bernardino counties' rates fell in December, to 4.4% and 3.7% respectively, and were down by 0.1 percentage points compared to last December.  Ventura County's unemployment rate dropped to 4.1% last month and was down by 0.2 percentage points year over year.  Finally, San Diego's unemployment rate was 2.3% last month, 8th lowest in the state and down from 2.5% in December 1999.
     The jobless rate also declined in the 8-county Bay Area to 1.9% in December from 2.2% in November.  San Jose, with an unemployment rate of 1.3% last month, continued to plumb the depths of its labor force in search of new workers.  At 1.8%, the San Francisco MSA (which includes Marin and San Mateo counties as well) also was below 2.0%.  Compared to last year, San Francisco's unemployment rate was down by 0.1% points while San Jose's rate dropped by 0.8%.  To the east of San Francisco Bay, Alameda/Contra Costa counties' combined jobless rate dropped to 2.2% in December versus 2.5% during December 1999.
     The unemployment picture in the Central Valley was much more varied last month than in the state's coastal region.  The Sacramento metro area was the inland bright spot with a 3.2% unemployment rate last month.  At the other extreme, December's pause in agricultural activity caused joblessness to rise into double digits in much of central California.  Examples include Merced County at 14.2%, Fresno at 14.0%, Tulare County at 15.8%, Kern County at 11.3%, and Imperial County with a whopping 21.7% unemployment rate.  (Nancy D. Sidhu)
PR: http://www.edd.ca.gov/nwsrel01.htm
PR: http://www.calmis.cahwnet.gov/file/lfmonth/cal1$pr.txt
 

DECEMBER JOB NUMBERS STILL STRONG

     While there has been much recent discussion about the state of the economy, California's December jobs report pointed to a still healthy situation.  Nonfarm employment was up over both the month and year.  The latter numbers were ahead 3.1% or by 441,200 jobs, in line with recent trends.  The services sector continued to set the pace with an increase over the year of 198,100 jobs, followed by government's 73,500 new jobs.  The state's manufacturing sector was up by 2,600 jobs, with the large electronics sector adding 5,400 new jobs.
     As a side bar, the "Interim" employment report for the state now has ES 202 data through the second quarter of 2000.  This continues to point to stronger growth than contained in the Current Employment Survey, or the monthly job report.
     Los Angeles County's nonfarm employment expanded in December by 2.1% or  87,300 jobs over the year.  Services added 44,900 new jobs, helped by motion picture production's increase of 10,900 (the latter reflects the surge in film production in anticipation of a strike). The government sector added 13,800 new jobs, while retail was close behind with 13,300.  The County's manufacturing sector continued its slide, down by 8,300 jobs over the year.  Aerospace lost 5,600, while apparel was down by 3,100 jobs.
     Orange County posted a 2.8% or 39,000 job increase in December, with the pace set by services (up by 15,500 jobs over the year), and government (up by 7,600 jobs).  The County's manufacturing sector saw employment move up by 4,300 jobs.  In the Riverside-San Bernardino area, it was hats and horns time as nonfarm employment moved over the 1 million mark.  This event actually occurred in November, according to revised data.  December's job number was 1,006,900, which is just a tad smaller than the Miami area's employment count.  The largest gains came in services (up 13,900 jobs over the year), and construction (up by 6,600).  The Riverside-San Bernardino area's manufacturing sector also posted a solid gain of 4,500 jobs.
     San Diego County's nonfarm employment advanced by 2.2% or 25,600 jobs in December.  Services added 7,400 jobs over the year, followed closely by retailing's 6,800 jobs.  The County's manufacturing sector posted a modest gain of 2,300 jobs.  Ventura County recorded a 2.1% or 5,600 job gain in December, with the biggest increases in manufacturing (+1,500 jobs over the year), and government (up by 1,300).
     There were solid employment gains in the Bay Area as well in December.  The San Francisco area set the pace with a 2.8% or 30,000 job increase over the year.  San Jose saw an advance of 2.5% or 24,200 jobs.  Revised data indicate that this area also moved over the 1 million nonfarm employment mark in November.  Finally, the Oakland area recorded a 1.9% or 19,200 increase in December.  (Jack Kyser)
 

HOUSING AFFORDABILITY FELL AGAIN

     California's housing affordability, as measured by the percentage of households that can afford to buy a median-priced home, fell to 31% in November.  The rate was 36% just a year ago.  Nationwide, the rate was 54%.  LA County's affordability was slightly higher than the state average at 34%.  Ventura County came in at 33%, which is 7 percentage points lower than a year ago.  Orange County, at 28%, was the least affordable among the Southern California regions.  Riverside-San Bernardino area remains the most affordable region at 47%.  Down south, San Diego came in at 23%, 8 percentage points below the Nov. '99 level.  Up north near the San Francisco Bay, the affordability is significantly lower.  The Bay Area rate was 17%, down from 25% a year ago.  Santa Clara County was also 17%, down from 26% a year ago.  Monterey County won the top honor (or dishonor, depending on who you are) at 16%.  (George Huang)
PR: http://www.car.org/newsstand/news/jan01-1.html
 

MAJOR EXPANSIONS SURGE IN 2000

     The LAEDC tracks major business expansions or relocations (a lease or permit value of $1 million or more) in the 5-county area.  Animal spirits were certainly at work in 2000, with a total of 370, compared with 191 major expansions in 1999.  Los Angeles County had 222 major expansions in 2000, up from 106 the year before, while Orange County recorded 95 versus 42 in 1999.  The Riverside-San Bernardino area had a 2000 total of 32, down a little from 1999's 38.  Ventura County came in with 21 major expansions in 2000, versus 5 the year before.
     By industry type, technology was the clear winner, with 121 major expansions (including a few dot-com's), compared with 26 in 1999.  Entertainment was second with 25, versus 9 the year before.  Logistics placed third with 17, down from 1999's count of 28.  The furniture industry had 13 major expansions in 2000, compared with 3 the year before, while bio-med had 12 versus 6 in 1999.
     Of the 2000 expansion total, 13 were firms expanding from other states.  Three each came from Florida and New York.
     These expansions certainly provide some momentum to the region's economy as it moves into a more uncertain 2001.  (Jack Kyser)
 

Y2K--A YEAR OF DOT-COM SHUTDOWNS & MARRIAGES

     According to a recent report by WebMergers.com, at least 210 Internet companies went belly-up in 2000.  Of these closures, nearly 60% happened in 4Q00.  75% were in the business-to-consumer (B2C) sector, which includes the now disgraced e-tailing (around 55%).  The estimated employment loss is between 12,000 and 15,000, which is not large by normal standards but quite significant in the lean-and-mean Internet sector.  More than 30% of the shutdowns occurred in California, which has the largest concentration of these dot-coms.  Those who made a quick fortune in e-commerce stocks may also have set a speed record in losing their wealth.  Some Internet stocks risk de-listing because of low market valuations and bid prices.  Many are rumored to fold as they fail to find further financing and run out of cash to sustain their money-losing operations.
     The luckier weak ones made it to the wedding altar instead of (or "before arriving at") the bankruptcy court.  At least $87 billion of mergers and acquisitions (M&A) activity (in 910 deals) were recorded in 2000, up 85% from 1999 (note: the AOL/Time Warner deal is not included in this tally).  60% of these M&A deals took place in 1Q00, right before the start of the NASDAQ meltdown.  Since most M&A were between Internet companies, the drop in market valuation did not automatically lead to an increase in M&A activity.  The "brick-and-mortar" companies, instead of buying up their Internet peers, have mostly opted to set up their own shops.  One interesting exception is Toys R Us, whose on-line operations performed miserably during the 1999 Christmas season.  It now partners with Amazon.com which handles customer service and order fulfillment.
     If you are in the market for some computer and office equipment, there are companies specializing in liquidating dot-com assets.  There are also some empty warehouses and office space looking for new tenants.  (George Huang)
Shutdowns PR: http://www.webmergers.com/editorial/010201_shutdownreport.php
M&A PR: http://www.webmergers.com/editorial/010201_mareport.php
 

QUICK STATS:

* BLS: US Producer Price Index for finished goods for 12/00: +0.0% (11/00: +0.1%)
* BLS: US Producer Price Index for intermediate goods for 12/00: +0.2% (11/00: -0.2%)
* BLS: US Producer Price Index for crude goods for 12/00: +8.7% (11/00: -2.0%)
* BLS: US export prices for 12/00: -0.1% (11/00: +0.0%)
* BLS: US import prices for 12/00: -0.5% (11/00: +0.1%)
* Cal EDD: California unemployment rate (seasonally adjusted) for 12/00: 4.6% (11/00: 4.8%)
* Cal EDD: California nonfarm employment for 12/00: +72,700 (11/00: +94,500)
* Cal EDD: LA County unemployment rate (s.a.) for 12/00: 5.0% (11/00: 5.1%)
* Cal EDD: LA County nonfarm employment for 12/00: +20,200 (11/00: +31,300)
* Census: US wholesale trade for 11/00: +0.0% (10/00: -0.1%)
* Census: US wholesale inventories for 11/00: +0.4% (10/00: +0.4%)
* Census: US retail trade for 12/00: +0.1% (11/00: -0.5%)
* Census: US business inventories for 11/00: +0.5% (10/00: +0.7%)
* Census: US business sales for 11/00: -0.3% (10/00: -0.5%)
* Federal Reserve: US consumer credit for 11/00: +10.2% (10/00: +7.5%)

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