The Economic Data Global Express (e-EDGE)

v.6 n.8       Released Feb. 25, 2002
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

STATE/LOCAL UNEMPLOYMENT RATES IN JANUARY

     California's unemployment rate edged up to 6.2% last month from a revised 6.1% in December.  The state's jobless rate was only 4.7% in January 2001.  This lackluster 1.4 percentage point deterioration was a little worse than the nation as a whole.  The U.S. unemployment rate has increased by 1.5 percentage points to 5.6% over the past 12 months.  (These figures are all adjusted to eliminate normal seasonal variation.)
     Jobless rates at the county level are not seasonally adjusted.  Typically, unemployment rates decline in December due to seasonal hiring for the holidays and rise in January as those jobs disappear.  Southern California unemployment rates all followed this pattern.  Los Angeles County's jobless rate rose from 5.9% to 6.6% last month, and Orange County's rate increased to 3.8% from 3.2% in December.  Unemployment rates also rose in Riverside County, up from 5.0% to 5.6%, and San Bernardino County where joblessness was 5.3%, up from 4.7%.  Ventura County registered higher joblessness as well, rising from 5.0% in December to 5.4% last month.  Compared to January 2001, last month's unemployment rates were noticeably higher in Los Angeles and Orange counties, up by 1.4 and 1.3 percentage points respectively.  The other three Southern California counties registered smaller year-to-year increases of 0.6 percentage points in San Bernardino County, 0.7 percentage points in Riverside County, and 0.8 percentage points in Ventura County.  San Diego's unemployment rate was 3.9% in January, up from 3.3% in December, and one percentage point higher than the 2.9% registered last year.
     Joblessness in Southern California has worsened noticeably over the past 12 months, with the combined 5-county jobless rate rising by 1.1 percentage points to 5.8% in January.  However, labor markets have deteriorated dramatically in the Bay Area, and the year-to-year margin of loss continued to widen in January.  The combined 9-county unemployment rate was 6.0% last month, 3.5 percentage points above the January 2001 level of 2.5%.  San Jose had the worst performance.  Last month's jobless rate was 7.5%, almost five times the January 2001 rate of 1.7%.  San Francisco and Alameda counties also registered big increases.  Their unemployment rates were up by 3.7 and 3.4 percentage points respectively over the past year to 6.3% and 7.0%.
     Unemployment continued high in most of the Central Valley. Compared to last year, however, the Central Valley's unemployment picture was mixed.  The jobless rate in Sacramento County was 5.2% last month, up from 4.3% in January 2001.  Nearby, San Joaquin County's unemployment rate increased by 1.1 percentage points, to 11.4%.  Joblessness in Fresno County fell over the year, down by 0.5 percentage points to 16.0%.  For once, Imperial County did not have the state's highest jobless rate, though it was high at 16.5%.  This distinction, if you want to call it that, belonged to Tulare County, which registered an unemployment rate of 18.3% in January.   (Nancy D. Sidhu)
PR: http://www.edd.ca.gov/nwsrel02.htm
 

JANUARY JOBS REPORT MIXED

     The Employment Development Department's (EDD) January report on nonfarm employment for California and its metro areas contained mixed news.  Some observers were encouraged by the 30,000 job increase from December to January (seasonally adjusted).  However, over the year, the state lost 40,200 nonfarm jobs.
     The unadjusted series (which we follow because it has much more industry detail) was down from December to January, but had a modest 4,400 job increase over the year.  This followed losses in November and December.  The state's manufacturing sector continued to shed jobs at a furious pace in January, down over the year by 118,300, with 47,100 of the loss in aerospace/high-tech.    Transportation-communications-public utilities (TCPU) was down by 24,000 jobs, while wholesale trade was off by 6,800.  Services added a very modest 14,700 jobs over the year in January, held back by losses in business services (-69,900) and motion picture production (-17,000).
     Los Angeles County lost 12,600 jobs over the year in January.  Manufacturing was down by 20,000 jobs, TCPU was off by 2,100, wholesale trade was down by 1,500, while services lagged by 9,000 jobs.  Contributing to the latter's wan performance were business services (-16,100), motion picture production (-15,900 jobs), while hotels declined over the year by 2,500 jobs.  A further note on the movie business: the industry's January job count of 117,300 was the lowest since June 1996.
     Orange County's January performance was muted, a gain of 16,600 jobs over the year.  Its manufacturing sector was off by 9,500 jobs, while TCPU was essentially flat over the year.  The County's services category was up by only 8,700 jobs over the year, with business services posting a loss of 2,600.  On the plus side, the Riverside-San Bernardino area recorded a 39,200 nonfarm job gain over the year in January, and you might ask . . . "where's the recession?"  However, the area's manufacturing sector lost 3,400 jobs over the year, while wholesale trade managed just a 500-worker increase.  San Diego County also turned in a fairly healthy jobs report in January, up by 28,900.  Its manufacturing sector was down over the year by 1,400 jobs, TCPU was off by 800, while wholesale trade was essentially unchanged over the year.  Ventura County added 2,200 jobs over the year, with losses in manufacturing (-500 jobs), and wholesale trade (-400 jobs over the year), while construction was flat.
     In the Bay Area, the EDD's January report was not good news.  The San Francisco metro area lost 35,200 jobs over the year, San Jose was down by 80,900 (-37,300 in manufacturing and -30,200 in services), while Oakland was off by a modest 2,300.  (Jack Kyser)
Cal. data: http://www.calmis.cahwnet.gov/file/lfmonth/cal$pr.txt
LA data: http://www.calmis.cahwnet.gov/file/lfmonth/la$pr.txt
 

WHAT DID THE EMPLOYMENT REVISIONS TELL US?

     The EDD's annual nonfarm employment revisions can be interesting, and this year's iteration was especially so.  The state's 2001 average nonfarm employment count was reduced by 79,500 jobs, with wholesale trade losing 38,000 jobs, and services being cut by 51,600 (business services got whacked by 112,100).  Los Angeles County's 2001 average nonfarm employment was reduced by 31,500 jobs, with a reduction of 10,400 in manufacturing.  Apparel manufacturing was the big loser.  Its 2001 employment average was reduced by 6,400 jobs.  The average for wholesale trade was cut back by 12,000 jobs, while services was reduced by 11,600.  In the latter, the average for business services was whittled by 22,500 jobs.
     Orange County's 2001 average nonfarm employment count was reduced by 10,400 jobs, with a significant reduction in the manufacturing sector -- a cut of 7,800 jobs.  On the other hand, the Riverside-San Bernardino area's 2001 average got bumped up by 7,300 jobs, even though its manufacturing sector being pared back by 2,200 jobs.   While San Diego seems to be strong, its 2001 nonfarm employment average was reduced by 8,300 jobs.  Finally, Ventura County's 2001 average was increased by 1,900 jobs.  (Jack Kyser)
 

U.S. TRADE DEFICIT LOWER IN DECEMBER AND FOR ALL OF 2001

     The U.S. trade deficit on goods and services in December was smaller than financial markets expected, $25.3 billion, representing a decline of $3.3 billion or 11.2% from November.  While U.S. imports declined slightly in December, by $3.3 billion, exports were at a virtual standstill, a minuscule drop of $200 million from November.  The dollar value of both exports and imports of goods and services showed significant declines during the last four months of 2001, reflecting the impact of the 9/11 terrorist attack.
     The November to December decreases in imports were spread across the board, including consumer goods, industrial materials, capital goods, automotive vehicles and parts, and food and beverages.  On the export side, decreases also occurred in capital goods, automotive vehicles and parts, and food and beverages.  But, increases occurred in exports of consumer goods, while industrial materials were virtually unchanged.
     For all of 2001, the U.S. trade deficit was $346.3 billion, $29.5 billion less than the deficit of $375.7 in 2000.  It was the first time in six years that the deficit has actually shrunk.  It is significant to note that the peak annual deficit recorded in 2000 was nearly four times the size of 1995's $96.4 billion.  The decrease from 2000 to 2001 may be viewed as an important break in the upward trend, but largely reflects the global economic slowdown which has dampened trade flows.
     Some interesting trends can be observed by examining U.S. bilateral trade deficits for last year.  Our largest deficit is with China ($83.0 billion), which has widened the gap with #2 Japan ($69.0 billion). We incur our third largest deficit with Canada, $53.3 billion, followed by OPEC ($39.7 billion), Mexico ($29.9 billion), and Germany (29.0 billion).  Not often highlighted is the fact that the United States actually runs a trade surplus with a few prominent countries.  For 2001, these included the Netherlands ($10.0 billion), Australia ($4.5 billion), Hong Kong ($4.4 billion), and Belgium ($3.4 billion).
     So, what does all this mean for the U.S. and California economy?  As 2002 unfolds, a greater foreign demand for American exports (which we anticipate) can be expected to speed the overall rate of growth of output and employment.  As U.S. imports are stepped up later this year, this will add momentum to our trading partners' economic growth.  Sounds like a positive-sum game or a win-win proposition.  (Ken Ackbarali)
PR: http://www.census.gov/indicator/www/ustrade.html
 

CONSUMER PRICES RECOVERED IN JANUARY

     The U.S. Consumer Price Index (CPI) rose by 0.2% in January, the first month-to-month increase since September.  Over the past 12 months, the CPI has increased by just 1.1%.  Energy prices rose by 0.9% last month and food prices by 0.3%, while the core CPI, which excludes food and energy prices, rose by 0.2%.  Gasoline prices rose by 1.9% in January after having dropped 27.0% during the post-9/11 fourth quarter.  Gasoline prices were 22.7% below the year-ago level.  New vehicles prices fell by 0.6%, thanks to factory-sponsored rebates (0% financing has no impact on the calculation of vehicle prices even though they matter to most car buyers).  Apparel prices fell by 0.7% last month, following 0.6% drops in each of the previous two months.
     Locally, the Los Angeles area CPI jumped by 1.0% last month, following three months of decline.  For the past 12 months, the CPI rose by 2.7%.  Food prices rose by 0.9% and energy prices jumped by 4.9%.  However, gasoline prices were 7.8% higher, while utility natural gas service posted a 13.4% increase.  Gasoline prices were still 21% below the year-ago level and natural gas prices were 32% lower.  Shelter costs rose by 1.0% last month and were 5.4% above the year-ago level (twice the increase of the overall CPI).  (George Huang)
US PR: http://www.bls.gov/news.release/cpi.nr0.htm
LA PR: http://www.bls.gov/ro9/ro9cpila.htm
Complete LA Area CPI data (1989-current), including usage tips: http://www.laedc.org/cpi-la.htm
 

RETAIL E-COMMERCE SALES

     U.S. retail e-commerce (e-tailing) posted a strong fourth quarter last year with $10.04 billion in sales, an increase of 13.1% over 4Q2000.  E-tailing accounted for 1.17% of total retail sales ($860.8 billion), up from 0.95% in 3Q01 and 1.09% in 4Q00.  For the whole year, e-tailing increased by 19.3% to $32.6 billion.  With two full years of e-tailing data, it's clear that e-tailing is even more seasonal than store-based retail operations.  Online shopping makes sense for the holiday season because customers can avoid long lines at the stores and the post office, and comparison shopping is easier (let your fingers and mice do the walking...).  (George Huang)
PR: http://www.census.gov/mrts/www/current.html
 

JANUARY PORT TRAFFIC MIXED

     Continuing its winning ways, the Port of Los Angeles reported that its loaded import container count was up over the year in January by 4.4%, while loaded export containers were up by 0.9%.  Total containers handled during the month at Los Angeles were up by 2.8%.  However, activity at Long Beach was weak, with import containers down by 7.3%, and export containers off by 8.0%.  Total containers handled at Long Beach in January were down by 2.8% to 344,645.  Total containers moved at both San Pedro Bay ports in January inched up by 0.2% to 752,881. While some people are watching for consistent year-to-year increases in traffic at both ports (a sign of economic recovery), this year could be different due to the potential for a work stoppage. (Jack Kyser)
POLA data: http://www.portofla.org/detailmonth.asp
POLB PR: http://www.polb.com/dec_01teus.htm
 

QUICK STATS:

* BLS: US Consumer Price Index for 1/02: +0.2% (12/01: -0.1%)
* BLS: LA Area Consumer Price Index for 1/02: +1.0% (12/01: -0.6%)
* Cal EDD: California unemployment rate for 1/02: +16.2% to 6.04 million annual units (12/01: -1.0% to 5.20mil.a.u.)
* Cal EDD: California nonfarm employment for 1/02: -267,800 (12/01: +27,900)
* Cal EDD: LA County unemployment rate for 1/02: 6.3% (12/01: 6.3%)
* Cal EDD: LA County nonfarm employment for 1/02: -68,300 (12/01: +5,600)
* Census: US exports for 12/01: +0.2% to US$77.9 billion (11/01: +0.3% to $77.7bil.)
* Census: US imports for 12/01: -2.9% to $103.2bil. (11/01: -0.5% to $106.3bil.)
* Census: US trade deficit for 12/01: US$25.3 billion (11/01: $28.5bil.)
* Census: US retail e-commerce sales for 4Q01: +34.4% (3Q01: +0.2%)
* Conference Board: US Index of Leading Economic Indicators for 1/02: +0.6% (12/01: +1.3%)
* Natl Assn of Realtors: US existing home sales for 1/02: +16.2% to 6.04 million annual units (12/01: -1.0% to 5.20 mil.a.u.)

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