The Economic Data Global Express (e-EDGE)

v.5 n.24       Released June 11, 2001
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

STATE/LOCAL UNEMPLOYMENT RATES ROSE IN APRIL

     California's unemployment rate was 4.9% in May, the same as in April but up from 4.7% in March.  Joblessness in the state was still below the 5.0% rate of May 2000.  Meanwhile, the national unemployment rate has risen from 4.1% in May 2000 to 4.4% over the past year.  (These figures are all adjusted for normal seasonal variation.)
     Jobless rates at the county level are not seasonally adjusted.  The normal seasonal pattern for May calls for employment to increase and unemployment to fall.  Unemployment rates in Southern California's counties were flat or down a little last month.  Four counties were still below their levels of May 2000, though Orange County's rate was up a tad (lots of technology firms and some layoffs there).  Here are the details:  Los Angeles County's unemployment rate edged down to 4.8% from 4.9% in April.  May's rate was down by 0.3 percentage points from May 2000.  Orange County's jobless rate was 2.5% last month, 0.1 percentage point below April and above last year's rate by the same margin.  Riverside County's 4.3% unemployment rate was below April's 4.5% and was 0.5 percentage points above May 2000, perhaps the best performance in the state.  San Bernardino and Ventura counties' jobless rates, at 4.4% and 3.4% respectively, matched their April level and were down by 0.3 percentage points from May 2000.  Finally, San Diego's unemployment rate was 2.7% last month, the same as in April but down from 2.9% in May 2000.
     The big news in this month's reports concerns the Bay Area, where local labor markets have turned noticeably weaker.  The 8-county unemployment rate reached a seasonal (and cyclical) low point of 1.9% in December.  By May, the region's combined jobless rate had jumped to 3.1%, still low but definitely on the increase.  (During the same period the 5-county Los Angeles area increased only from 4.1% in December to 4.2% in May.)  Last month's performance wasn't very impressive either.  The unemployment rate in tech-heavy San Jose registered the biggest increase, jumping by 0.5 percentage points to 3.1% in a single month.  Jobless rates in metropolitan San Francisco and Alameda/Contra Costa counties rose by 0.4 and 0.2 percentage points respectively, to 3.1% and 3.2%.  In San Francisco's case, May's unemployment rate was the highest since September 1998.
     The Sacramento metro area economy continued to look relatively healthy, with a 3.5% unemployment rate last month, down from 3.6% in April and 3.9% in May 2000.  Jobless rates declined in most of the Central Valley in May, though they remained relatively high.  San Joaquin County registered a rate of 7.8% and Kern County turned in 9.5%.  Most of the other Valley counties had jobless rates in the low double-digits.  Typical examples include Fresno MSA at 12.7%, Tulare County at 13.2%, and Imperial County with a 19.2% unemployment rate, highest in the state.  (Nancy D. Sidhu)
PR: http://www.edd.ca.gov/nwsrel06.htm
PR: http://www.calmis.cahwnet.gov/FILE/LFMONTH/CAL1$PR.TXT
 

NONFARM EMPLOYMENT SLOWS IN MAY

     The May data from the California Employment Development Department continued to show a slower pace of growth in nonfarm jobs.  While comparisons with last year are somewhat skewed because of Census hiring, the May 2001 report indicates that the tech sector in California is feeling pain.  For the state, nonfarm employment was up over the year by 2.3% or 339,200 jobs.  Of note is the fact that manufacturing jobs moved into a job loss mode, declining over the year by 7,600, with weakness concentrated in the nondurable sector.  Food processing was off by 7,900 jobs, and apparel/textiles declined by 3,500.  In services, gains in computer programming jobs continued to weaken, with the May increase at only 32,400 compared with January's 72,600 gain.
     In Los Angeles County, May saw a 1.3% increase or 52,500 jobs over the year, again with Census hiring last year playing a role.  Adjusting for the Census distortion, yearly job growth could be about 69,000, about in line with recent trends.  However, losses in manufacturing accelerated, with a 9,700 job decline.  Aerospace was down by 5,100 jobs, and apparel/textiles was off by 3,500.  In services, year-over-year increases in business services continued to ease, while the motion picture production numbers continued to make little sense.  Orange County posted a 3.1% or 43.000 increase in May, with continued gains in manufacturing.  In services, the recent opening of Disney's California Adventure continued to have a positive impact.
     In the Riverside-San Bernardino area, May nonfarm jobs were up by 2.9% or 28,900, a significant slowing from recent trends.  Even adjusting for the Census distortion, the pace of growth seems to have eased.  On the good news side, manufacturing in the area continued to expand, up by 3,300 jobs.  San Diego County recorded a 2.9% or 35,000 job gain in May.  Adjusting for Census activity last year, this is not too far off recent trends.  However, manufacturing job gains were down to a crawl.  In Ventura County, nonfarm employment was up by 1.7% or by 4,800 jobs over the year.  Adjusting for the Census, there was a slowing from the recent pace of job growth.  And manufacturing decelerated sharply.  (Jack Kyser)
 

BRITISH LABOR PARTY ELECTION VICTORY--JOIN THE EURO?

     The historic election victory of the British Labor Party last week could change the character of world currency markets and could have profound implications for the future of the euro.  While Prime Minister Tony Blair campaigned on a platform to improve education, health, and other public services, his Conservative Party opponent (William Hague) pushed for lower taxes and staying out of the euro system.  Hague's expected and eventual defeat led to the pound sterling falling to a 15-year low of $1.38 last Friday.
     Over the next 6 to 12 months, it is conceivable that public opinion could shift enough in favor of the U.K. entering the Euro-zone that Prime Minister Blair will be encouraged to take the risk of holding a referendum on this issue.  If the election results had been close, this issue would have remained below the radar screen for an indefinite period. While the landslide  Labor victory at the polls is no guarantee that public sentiment will favor adoption of the euro, the election results have raised the chances of adoption.
     Why should we (in the U.S. and California) care about the outcome?  Given that the U.K. is the 4th largest economy in the world and London is the biggest financial center in Europe, a decision to be part of the euro bloc can help to strengthen and stabilize the new currency.  More importantly, a less fragile and volatile euro will be more attractive to investors and will reduce the burden on the dollar in its role as the world's currency of choice.  A strong euro that is widely held as a reserve currency would also make the Federal Reserve's conduct of monetary policy less complicated.  So, we will be watching carefully to see how Prime Minister Blair plays the "euro card."  (Ken Ackbarali)
 

LOCATION FILMING ACTIVITY EASES IN MAY

     According to the Entertainment Industry Development Corporation, off-lot production days in May were up over the year by 7.6%.  This was a break from the double digit year-to-year gains recorded since December, 2000.  Location production of features continued strong with a 26.7% increase over the year.  However, the other 3 categories posted declines, with commercial production activity down by 14.5%.  This was a reflection of the weak advertising market.
     The Writer's Guild (WGA) contract is signed, sealed and delivered, but negotiations between the studios and the Screen Actors Guild are preceding at a leisurely pace, with a news blackout in force.  The feeling is that this situation will go down to the July 1 expiration date.  This plays havoc with manicures in Hollywood.  (Jack Kyser)
Data: http://www.eidc.com/Coverage/Production_Data/Shooting_Days/shooting_days.html
 

AIRLINE TRAFFIC WEAK IN APRIL

    

Total passenger traffic moving through Los Angeles International Airport in April was up a wan 0.4% (March also came in at 0.4%), with growth the result of 1.9% increase in international traffic.  Air cargo tonnage also continued to trace a downward course, with a 13.6% decline over the year.  At Ontario, the passenger traffic numbers were much cheerier, with April up by 7.4% over the year.  This reflects new service.  But Ontario's air cargo numbers were in the same boat as LAX, with a 12.7% decline.
     At John Wayne/Orange County, April traffic was down by 6.4% over the year.  However, Palm Springs Airport managed a 1.9% increase during the month, breaking a string of declines that first surfaced in June 2000.
     LAX's international air cargo tonnage numbers also continued to be dismal.  Export tonnage in April was down by 11.3%, while import tonnage slipped 5.1%.  Total international air cargo tonnage for the month was off 7.8%, the 6th decline in a row.  (Jack Kyser)
LAX data: http://www.lawa.org/statistics/tcom-0401.pdf

 

QUICK STATS:

* BLS: US nonfarm labor productivity for 1Q01 (revised): -1.2% annual rate (4Q00: +2.0% a.r.)
* BLS: US nonfarm unit labor costs for 1Q01 (rev.): +6.3% a.r. (4Q00: +4.5% a.r.)
* BLS: US nonfarm inflation-adjusted hourly compensation for 1Q01 (rev.): +0.9% a.r. (4Q00: +3.6% a.r.)
* Cal EDD: California unemployment rate for 5/01: 4.9% (4/01: 4.9%)
* Cal EDD: California nonfarm employment for 5/01: +61,000 (4/01: +35,500)
* Cal EDD: LA County unemployment rate for 5/01: 5.1% (4/01: 5.1%)
* Cal EDD: LA County nonfarm employment for 5/01: +3,800 (4/01: +5,000)
* Census: US new factory orders for 4/01: -3.0% (3/01: -0.7%)
* Census: US factory shipments for 4/01: -2.5% (3/01: -0.1%)
* Census: US factory inventories for 4/01: +0.1% (3/01: -0.8%)
* Census: US unfilled factory orders for 4/01: -0.3% (3/01: -0.0%)
* Census: US wholesale trade for 4/01: +0.3% (3/01: -1.5%)
* Census: US wholesale inventories for 4/01: +0.3% (3/01: +0.1%)
* Federal Reserve: US consumer credit for 4/01: +11.2% (3/01: +5.9%)

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