The Economic Data Global Express (e-EDGE)

v.6 n.11       Released Mar. 18, 2002
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

STATE/LOCAL UNEMPLOYMENT RATES IN FEBRUARY

     California's unemployment rate dropped back to 6.1% last month from a revised 6.4% in January.  January's rate was originally estimated as 6.2% but a large number of unemployment claims were reported late.  The state's jobless rate was only 4.7% in February 2001.  This lackluster performance was a little worse than the nation as a whole.  The U.S. unemployment rate has increased from 4.2% to 5.5% 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, employment rises and unemployment rates edge down a little in February.  Southern California unemployment rates followed this pattern last month.  Los Angeles County's jobless rate fell from 6.8% to 6.4% last month, and Orange County's rate decreased to 3.6% from 3.9% in January.  Unemployment rates also dropped in Riverside County, down from 5.7% to 5.4%, and San Bernardino County where joblessness was 5.1%, down from 5.5%.  Ventura County registered lower joblessness as well, falling from 5.5% in January to 4.7% last month.  Compared to February 2001, last month's unemployment rates were noticeably higher in Los Angeles and Orange counties, up by 1.4 and 1.1 percentage points respectively.  The other three Southern California counties registered smaller year-to-year increases of 0.4 percentage points in Riverside County, 0.5 percentage points in San Bernardino County, and 0.7 percentage points in Ventura County.  San Diego's unemployment rate was 3.7% in February, down from 4.1% in January, and 0.7 percentage points higher than the 2.8% registered last year.  All of the February year-to-year increases were slightly smaller than they had been in January except for Los Angeles' increase, which was the same.
     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 5.6% last month.  However, labor markets have deteriorated dramatically in the Bay Area, though the year-to-year margin of loss narrowed a little in January.  The combined 9-county unemployment rate was 5.7% last month, 3.2 percentage points above the February 2001 level of 2.5%.  San Jose really took it on the chin.  Last month's jobless rate was 7.3%, about four times the February 2001 rate of 1.8%.  San Francisco and Alameda counties also registered big increases.  Their unemployment rates were up by 3.1 and 3.7 percentage points respectively over the past year to 6.6% and 6.1%.
     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 5.0% last month, up from 4.2% in February 2001.  Nearby, San Joaquin County's unemployment rate increased by 0.9 percentage points, to 11.0%.  Joblessness in Fresno and Tulare counties was high but down over the year by 0.9 and 0.5 percentage points to 15.9% and 17.8% respectively.  And Imperial County's jobless rate dropped by 3.8 percentage points, though it still was high at 14.5%.  (Nancy D. Sidhu)
PR: http://www.edd.ca.gov/nwsrel03.htm
Data: http://www.calmis.cahwnet.gov/file/lfmonth/cal1$pr.txt
 

MIXED TRENDS IN FEBRUARY EMPLOYMENT DATA

     There were mixed trends in the February report from the California Employment Development Department (EDD).  For the state, nonfarm employment declined over the year by 31,700 jobs, a larger loss than in January.  Manufacturing shed 124,100 jobs, transportation-communications-public utilities (TCPU) dropped 25,000, services declined by 9,300 jobs, while wholesale trade  lost 6,800.  In services, the business service sector was off by 79,700 jobs over the year.  Further slicing the data, personnel supply lost 35,400 jobs, while computer programming dropped 27,700.   EDD noted that total civilian employment, which includes the self-employed and comes from a separate survey was up over both the month and year, with the latter increase at 73,600 jobs.
     Around Southern California, the February job trends were also mixed.   Los Angeles County lost 21,200 nonfarm jobs over the year, while total civilian employment was up by 23,100 jobs.  Manufacturing was down by 20,200 jobs, services was off by 14,800, construction and wholesale trade each lost 1,500, while TCPU was essentially flat over the year.  In the County's service sector, business services dropped by 19,600 jobs, while motion picture production declined by 16,800 (the "de facto" strike is still painfully in evidence).
     The February employment news was better in Orange County, with an increase of 16,300 nonfarm jobs over the year, while total civilian employment was ahead by 18,600.  However, it was not all good news, with manufacturing declining by 9,200 jobs, while TCPU was flat.  The Riverside-San Bernardino area's economy continued to roar ahead, with nonfarm employment up by 39,100 jobs over the year, while total civilian employment was up by a thumping 56,000.  However, the manufacturing sector continued to lose jobs, down by 3,000.  San Diego County's February job data was also strong, with nonfarm employment up over the year by 25,800 jobs and total civilian employment up by 29,800.  Again, there was a decline in manufacturing, with 3,300 jobs disappearing over the year.  TCPU was also off by 1,400 jobs while wholesale trade was down by 400.  Rounding out the Southern California news, Ventura County added 3,500 nonfarm jobs over the year, while civilian employment was ahead by 8,500.  Manufacturing and wholesale trade, however, were both down modestly over the year.
     In the Bay area, the EDD's February employment report continued to make for poor reading.  In the San Francisco metro area, nonfarm employment was down  by 40,700 jobs over the year, while civilian employment declined by 26,900 jobs.  In the Oakland area, nonfarm employment was off by 5,600 jobs, while total civilian employment slipped by 3,600 jobs.  Finally, the San Jose area lost 82,400 nonfarm jobs over the year, while civilian employment dropped by 77,200 jobs.  (Jack Kyser)
CA Data: http://www.calmis.cahwnet.gov/file/lfmonth/cal$pr.txt
LA Data: http://www.calmis.cahwnet.gov/file/lfmonth/la$pr.txt
 

FEDERAL RESERVE EXPECTED TO HOLD RATES STEADY

     The Federal Reserve's Open Market Committee (FOMC) will hold its scheduled meeting tomorrow to determine whether economic conditions warrant an increase in its key monetary target, the Fed Funds Rate (FFR), or hold it steady.  The decision will hinge on the FOMC's assessment as to the U.S. economy's recovery status.  Is the recession over and a recovery underway?  Although the evidence that this has occurred is mounting, it may still not be conclusive enough for some members of the FOMC.
     The factors that are likely to dominate the FOMC's deliberations and lead to the adoption of a holding stance on interest rates are:
     (1)The need to monitor the interest-sensitive housing and automobile sectors of the economy, both of which remained strong all through the recession.  Will consumer confidence stay strong and keep these sectors perking?
     (2) Business investment and corporate profits continue to show weakness--for how many more quarters?
     (3) Government spending for the military and homeland security is certain to be ramped up further in order to counter various terrorist threats at home and abroad.
     (4) Consumer confidence will continue to be hammered by announcements of large worker layoffs, coming from bankruptcy filings and mergers.
     (5) Global economic conditions are still weak, in fact abysmal in Japan and tentative in Europe.
     (6) Although the stock market has risen in recent weeks, "Enronitis" has hurt its ability to sustain any traction.
     The Federal Reserve can afford to wait until its June meeting, without much risk, before raising the FFR from its 40-year low of 1.75%.  If the economy's recovery does not turn out to be sustaining and widespread over the next quarter, the first interest rate hike may even be delayed until after mid-year.  Stay tuned for refinements to this outlook.  (Ken Ackbarali)
 

PRODUCER PRICES STABLE

     The U.S. Producer Price Index (PPI) for finished goods rose by 0.2% last month, following a 0.1% increase in January.  Energy prices rose by 0.4%, thanks to a 4.5% jump in gasoline prices and smaller increases in other petroleum-based fuels.  Sharp price increases in vegetable, beef, and fish led to a 1.0% increase in food prices.  Excluding food and energy prices, the core PPI for finished goods was unchanged last month.  The PPI for finished goods was 2.6% below the year-ago level.
     The PPI for intermediate goods fell by 0.1% in February.  This is the fifth consecutive monthly decline.  Food prices were unchanged at this level.  Energy costs dropped by 0.7%, thanks to price declines in electric power and natural gas.  The core PPI at this level was also unchanged from a month ago.  The PPI for intermediate goods was 4.4% below the year-ago level.
     The PPI for crude goods and raw materials fell by 0.8% last month, following a 3.7% jump in January.  Food prices rose by 2.3%.  Energy costs declined by 6.5%, after a 5.6% increase in January.  Natural gas prices fell by 20.7% last month and were 70.4% below the year-ago level.  Crude oil prices jumped 13.3% but were still 34.6% cheaper than a year ago.  Prices for some industrial materials such as steel and metal ores also rose last month, responding to the beginning of a recovery in industrial demand.  (George Huang)
PR: http://www.bls.gov/news.release/ppi.nr0.htm
 

HOTEL BIZ RECOVERING IN JANUARY

     According to the latest data from PKF Consulting, the hotel industry is slowly climbing out of the hole created by the 9/11 attack.  For L.A. County, the occupancy rate was 62.4% in January.  While this was down from last year's 69.5% occupancy, it was the strongest reading for this measure since last August.  The average daily room rate was also down by 3.2% over the year, to $119.41.  There were some strong performances by sub-area in the County as well.  Pasadena posted an 80.4% occupancy (thanks to the BCS game), while Valencia recorded a 71.9% rate and Santa Monica came in at 70.1% (also BCS).
     Orange County hotel occupancy rate in January was 56.3%, down from 63.3% a year ago.  The average daily room rate was $114.96, down from $118.42 a year ago.    The strongest market was South County with a occupancy rate of 61.5%.  Anaheim is still suffering from the decline in tourism.  The occupancy rate in January was 55.0%, down from 60.0% a year ago (before California Adventure opened).
     Little recovery is in sight in San Francisco, with a January occupancy rate of 49.9%.  However, the news was a tad brighter for the San Jose/Peninsula area, with a 58.5% reading.  This was the highest since August 2001.  (Jack Kyser)
 

QUICK STATS:

* BEA: US current account for 4Q01: -US$98.8 billion (3Q01: -$98.5bil.)
* BLS: US Producer Price Index for finished goods for 2/02: +0.2% (1/02: +0.1%)
* BLS: US Producer Price Index for intermediate goods for 2/02: -0.1% (1/02: -0.1%)
* BLS: US Producer Price Index for crude goods for 2/02: -0.8% (1/02: +3.7%)
* BLS: US export prices for 2/02: -0.2% (1/02: -0.1%)
* BLS: US import prices for 2/02: -0.1% (1/02: +0.4%)
* Cal EDD: California unemployment rate for 2/02: 6.1% (1/02: 6.4%)
* Cal EDD: California nonfarm employment for 2/02: +64,700 (1/02: -283,100)
* Cal EDD: LA County unemployment rate for 2/02: 6.4% (1/02: 6.6%)
* Cal EDD: LA County nonfarm employment for 2/02: +21,700 (1/02: -74,700)
* Census: US retail sales for 2/02: +0.3% (1/02: -0.3%)
* Census: US business sales for 1/02: +1.1% (12/01: +0.0%)
* Census: US business inventories for 1/02: +0.2% (12/01: -0.5%)
* Federal Reserve: US industrial production for 2/02: +0.4% (1/02: +0.2%)
* Federal Reserve: US industrial capacity utilization rate for 2/02: 74.8% (1/02: 74.5%)
* U. Michigan: US Consumer Sentiment Survey for 3/02: 95.0 (2/02: 90.7)

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