The Economic Data Global Express (e-EDGE)

v.5 n.46       Released Nov. 13, 2001
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

STATE/LOCAL UNEMPLOYMENT RATES MOSTLY UP IN OCTOBER

     Pretty much as expected, California's unemployment rate rose to 5.7% last month from 5.4% in September and 5.3% in August.  The state's jobless rate was 4.9% in October 2000.  While uninspiring, the state's performance still looked better than the nation as a whole.  The U.S. unemployment rate has increased from 3.9% to 4.9% over the past 12 months, substantially narrowing the gap between California and the rest of the nation.  (These figures are all adjusted to eliminate normal seasonal variation.)
     Jobless rates at the county level are not seasonally adjusted.  Southern California unemployment rates turned a mixed performance during October.  Los Angeles County's jobless rate was stable at 5.9% last month.  Unemployment rates also did not change in either Riverside  (which registered 5.8%) or San Bernardino (at 4.7%).  Meanwhile, Orange County's jobless rate rose to 3.4% from 3.2% in September, while Ventura County's rate declined from 5.2% to 4.8%.   Compared to October 2000, last month's unemployment rates were noticeably higher in Los Angeles County, up by 0.7 percentage points from 5.2%, and Orange County, up by 0.9 percentage points from 2.5%.  The other three Southern California counties registered smaller year-to-year increases of 0.4 percentage points in Ventura County, and only 0.1 percentage points in Riverside and San Bernardino counties.  San Diego's unemployment rate was 3.5% in October, up slightly from 3.4% in September, and noticeably higher than the 2.9% registered last year.
     Overall, Southern California's unemployment position has weakened perceptibly over the past 12 months, with the combined 5-county jobless rate rising by 0.6 percentage points to 5.3%.  However, the Bay Area's labor markets have deteriorated sharply.  The combined 8-county unemployment rate was 5.0% last month, well above the October 2000 level of 2.2%.  San Jose MSA was in the worst shape.  Its jobless rate was 6.4% last month, four times (!) the October 2000 rate of 1.6%.  San Francisco MSA (which consists of Marin, San Francisco, and San Mateo counties) and Alameda/Contra Costa counties also have registered big increases in unemployment, rising by 2.5 and 2.2 percentage points respectively over the past year, to 4.5% and 4.8%.
     Compared to last year, the Central Valley's unemployment picture is mostly flat to improved.  Joblessness in Sacramento County was 4.2% last month, up only slightly from October 2000.  Nearby, San Joaquin County's unemployment rate also edged up to 7.6%.  Several major counties in the San Joaquin Valley showed improvement including Kern County, down by 0.8 points to 9.1%, and Fresno County, down by 1.6 percentage points to 11.7%.  As usual, Imperial County had the state's highest jobless rate, 24.1%, but also registered the biggest improvement, down by 7.7 percentage points from last year.  (Nancy D. Sidhu)
PR: http://www.edd.ca.gov/nwsrel11.htm
PR: http://www.calmis.cahwnet.gov/file/lfmonth/cal1$pr.txt
 

OCTOBER JOBS REPORT RATHER MALO

     The October report from the Employment Development Department was not as bad as might have been expected in light of the national data, with unadjusted nonfarm employment in the State up over both the month and year.  However, the year-to-year growth rate has shriveled to just 0.7% or 100,700 jobs.  Job losses in manufacturing continued to accelerate (-76,800), due to those old devils aerospace and apparel.  Job declines from September to October were also recorded in construction, transportation/communications/public utilities, wholesale trade, retail trade, finance, and services.  Government was the main support.
     Los Angeles County's October numbers were really malo, with year over year growth down to 0.2% or a measly 9,100 jobs.  Manufacturing continued to shrink, wholesale trade is moving sideways, and service industry job counts were down to an increase of just 8,100 jobs compared with last October.  Hotels and amusements jobs were below last year (no surprise), but the month-to-month job losses were modest, 800 and 1,500 respectively.  In the meantime, business services has gone negative,  The stunner was the 8,400 job loss in motion picture production.
     The news from Orange County was a little better.  Nonfarm employment was up over the year by 1.9% or 26,700 jobs in October.  However, the county's manufacturing sector has weakened, while growth in services continued to ease.  Hotel employment was down by 400 jobs from September to October, but amusements jobs were up by 900 jobs.   The pace of job growth in the Riverside-San Bernardino area continued to slide in October, with an increase of 2.1% or 21,600 jobs.  The area's once hot manufacturing sector continued to move sideways.
     Nonfarm employment in San Diego County in October posted a 2.1% increase or 25,900 jobs.  Manufacturing here has topped out, while service employment  weakened.  Hotel jobs were down over the month by 400 jobs, while amusements were off by 1,300.  Job growth in Ventura County also slowed in October, registering an increase over the year of 0.4% or 1,200 jobs.  Manufacturing here is now in a year-to-year job loss mode, as is services.
     Now for muy malo news.  In the Bay Area, the San Francisco metro area's year-over-year job gains continued to ease, with an increase of only  5,900 in October.  Oakland managed an 11,800 increase, but San Jose recorded a loss of 27,300 jobs, and the pace is accelerating.  (Jack Kyser)
Ca. data: http://www.calmis.cahwnet.gov/file/lfmonth/cal$pr.txt
LA Co. data: http://www.calmis.cahwnet.gov/file/lfmonth/la$pr.txt
 

WTO MEETING IN THE MIDDLE EAST:  RICH VERSUS POOR NATIONS?

     The World Trade Organization (WTO) ministerial conference began its 5-day (11/9-11/13) session in the Persian Gulf state of Qatar last Friday.  This is the first meeting of the WTO since the ill-fated December 1999 meeting in Seattle, which was disrupted by protesters and failed to reach any substantive trade agreements.  Despite concerns about security (Qatar is about 1,000 miles from the fighting in Afghanistan and most immigrant workers in the country are Moslems), all of the 142 member countries of the WTO have sent delegations.
     The WTO agenda is very ambitious.  The most contentious issues will see rich (industrialized) countries and poor (developing) countries lined up against each other.  Developing countries are opposed to launching a new round of trade negotiations, claiming that they were unfairly treated in the Uruguay round that ended in1994.  The U.S., EU, and other industrialized countries will lobby strongly for a new round that will last three to four years.
     A "deal-breaker" could be TRIPS (trade-related intellectual property rights), with developing countries led by South Africa, Brazil, and India wanting an exemption to TRIPS that would give them unlimited access to a broad range of medicines and pharmaceutical patents.  The US is willing to compromise and allow limited access in cases involving such public health issues as AIDS and anthrax attacks.  The EU is prepared to be more accommodating.
     Europe and Japan oppose the reduction and eventual phasing out of export subsidies on agricultural products.  France is particularly adamant on this issue and tends to cherish its historic attitude of protectionism.  On environmental issues, the EU's stance is tougher than the U.S., with Germany the least willing to compromise.
     Given the wide range of trade liberalization and "fairness" issues dividing the members of the WTO, approval of China and Taiwan's membership in the group may end up being the least dramatic event of the meeting, even though China's membership has momentous implications for the future of world trade.
     A World Bank study, published October 31st, makes the stunning conclusion that "once the impact of greater openness on productivity is taken into account, the elimination of import tariffs, export subsidies and domestic production subsidies would increase global income by $2.8 trillion over ten years, with well over half the benefits going to poor countries."  With such an astonishing potential, we wish the WTO delegates the best of luck in accomplishing even part of their agenda.  (Ken Ackbarali)
 

DEFLATION ON THE HORIZON?

    

The U.S. Producer Price Index (PPI) for finished goods dropped by a record-breaking 1.6% last month, falling much more than expected.  This index reflects prices at the wholesale level.  The 1.6% decline is the largest decline since the compilation of PPI began in 1947.  The decline was led by petroleum-based energy products: gasoline prices fell by 21.2%, for example.  Overall, energy costs fell by 7.7% and food costs were down by 0.4%.  The core PPI, which excludes those two volatile sectors, declined by 0.5%--the largest decline since August, 1993.  The item with the largest price decline in the core PPI was passenger cars, down by 4.7% on a seasonally adjusted basis.  This does not reflect 0% financing and other incentives for consumers, but reflects new model year pricing.  Some of those incentives will show up in the upcoming Consumer Price Index (CPI) report.  Compared to a year ago, the PPI for finished goods was down by 0.4%.
     The PPI for intermediate goods was down by 1.5%.  Once again petroleum-based energy led the way, but there was also deflationary pressure in the natural gas sector, which will impact this winter's energy  and electricity costs.  There should not be a shortage of heating oil this winter for any region of the country as inventories will build up, because of a drastic decline in the demand for jet fuel.  (Jet fuel costs fell by 21.8% last month and were 35.8% below the year-ago level.)  The PPI for intermediate goods was 2.4% below the year-ago level.  The PPI for crude goods (i.e. raw materials) was down by 9.1%, thanks to a 27.5% decline in natural gas prices and a 19.6% decrease in petroleum prices.  Over the year, the PPI for crude goods dropped by a stunning 25.0%.
     Next week we'll get the October CPI data, which includes costs of services.  It is widely expected that the CPI will post a small decline.  This will be the first CPI report that reflects prices after the Sept. 11th attack.  September price data were gathered at a time when price changes resulting from the attack were not yet prevalent.  (George Huang)

PR: http://www.bls.gov/news.release/ppi.nr0.htm
 

HOTEL OCCUPANCY RATES IN SEPTEMBER

     PKF Consulting has just released the hotel occupancy data for September, and again the news was not pretty.  In Los Angeles County, occupancy came in at 58.3%, down 25.4% from last year's 78.1% level.  The average daily room rate also declined, by 8.2% to $108.26.  But would you believe Valencia with an 81.7% reading?  The next highest was Hollywood at 69.1%.  The weakest showing during September was posted by the Downtown hotels (over $85), at a wan 37.8% occupancy.
     The Orange County hotel market also got hammered in September, with an average occupancy of 50.6%, well down from last year's 74.0%.  The average daily room rate (ADR) also dropped, by 6.2% to $103.39.  The strongest market during the month was North Orange County at 54.2%, followed closely by the Airport Area at 53.7%.  (Jack Kyser)
 

LOCATION PRODUCTION DAYS ALSO WEAK IN OCTOBER

     The Entertainment Industry Development Corporation's October report on off-studio lot film production activity was no fun either.  Total production days were down over the year by 21.4%, paced by a 56.2% slippage in feature films, and a 21.3% drop in TV.  However, commercial activity was up by 151.0%, over a strike impacted 2000 number.
     Year-to-date location production days are up by 6.0%, but there is little sign of a turn-around for November or December.  (Jack Kyser)
 

QUICK STATS:

* BLS: US nonfarm labor productivity for 3Q01: +2.7% annualized rate (2Q01: +2.2% a.r.)
* BLS: US nonfarm unit labor costs for 3Q01: +1.8% a.r. (2Q01: +2.6% a.r.)
* BLS: US nonfarm labor hours for 3Q01: -3.6% a.r. (2Q01: -2.5% a.r.)
* BLS: US nonfarm output for 3Q01: -1.0% a.r. (2Q01: -0.4% a.r.)
* BLS: US export prices for 10/01: -0.7% (9/01: +0.1%)
* BLS: US import prices for 10/01: -2.4% (9/01: +0.1%)
* BLS: US Producer Price Index for finished goods for 10/01: -1.6% (9/01: +0.4%)
* BLS: US Producer Price Index for intermediate goods for 10/01: -1.5% (9/01: +0.1%)
* BLS: US Producer Price Index for crude goods for 10/01: -9.1% (9/01: -4.1%)
* BTM/Schroders: US chain store sales for 10/01: +2.3% (9/01: +0.9%)
* Cal EDD: California unemployment rate for 10/01: 5.7% seasonally adjusted (9/01: 5.4% s.a.)
* Cal EDD: California nonfarm employment for 10/01: -24,000 (9/01: -54,200)
* Cal EDD: LA County unemployment rate for 10/01: 5.9% not seasonally adjusted (9/01: 5.9% n.s.a.)
* Cal EDD: LA County nonfarm employment for 10/01: -12,100 (9/01: -22,800)
* Census: US wholesale trade for 9/01: -1.3% (8/01: +0.5%)
* Census: US wholesale inventories for 9/01: -0.1% (8/01: -0.2%)
* Federal Reserve: US consumer credit for 9/01: +2.4% a.r. (8/01: +4.6% a.r.)
* Univ. of Michigan: US consumer sentiment survey for 11/01: 83.5 (10/01: 82.7)


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