The Economic Data Global Express (e-EDGE)

v.6 n.15       Released April 15, 2002
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

STATE/LOCAL UNEMPLOYMENT RATES IN MARCH

     California's unemployment rate returned to 6.4% last month from a revised 6.2% in February and 6.4% in January.   The state's jobless rate was only 4.8% in March 2001.  This lackluster performance was a little worse than the nation as a whole.  The U.S. unemployment rate has increased from 4.3% to 5.7% 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 fall in March.  Some of the Southern California county unemployment rates followed this pattern last month but not all.  Los Angeles County's jobless rate was 6.5% last month, the same as February.  Orange County's rate also showed no change.  However, unemployment rates dropped in Riverside County, down from 5.5% to 5.2%, San Bernardino County where joblessness was 5.1%, down from 5.2%, and Ventura County whose jobless rate fell from 4.7% in February to 4.6% last month.  Compared to March 2001, last month's unemployment rates were noticeably higher in Los Angeles and Orange counties, up by 1.6 and 1.3 percentage points respectively.  The other three Southern California counties registered smaller year-to-year increases of 0.6 percentage points in Riverside County, 0.7 percentage points in San Bernardino County, and 1.0 percentage points in Ventura County.  San Diego's unemployment rate was 3.8% in March, unchanged from February and 1.2 percentage points higher than the 2.6% registered last year.
     Joblessness in Southern California has worsened noticeably over the past 12 months, with the combined 5-county jobless rate rising by 1.3 percentage points to 5.6% last month.  However, labor markets have deteriorated quite dramatically in the Bay Area.  The combined 9-county unemployment rate was 5.8% last month, 3.2 percentage points above the March 2001 level of 2.6%.  San Jose has experienced the worst of the area's problems.  Last month's jobless rate was 7.4%, over four times the March 2001 rate of 2.2%.  San Francisco and Alameda counties also registered big increases.  Their unemployment rates were up by 3.0 and 3.2 percentage points respectively over the past year to 6.6% and 6.2%.
     Unemployment continued high in most of the Central Valley during March. 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 3.9% in March 2001.  Nearby, San Joaquin County's unemployment rate increased by 1.3 percentage points, to 10.8%.  Joblessness in Fresno, Tulare, and Kern counties was high but down over the year by 0.3, 0.1, and 0.5 percentage points to 16.5%, 18.6%, and 13.6% respectively.  Imperial County's jobless rate has dropped by 3.5 percentage points over the year, though it still was relatively high at 13.5%.  (Nancy D. Sidhu)
PR: http://www.edd.ca.gov/nwsrel04.htm
Data: http://www.calmis.cahwnet.gov/file/lfmonth/cal1$pr.txt
 

EMPLOYMENT IN MARCH LACKLUSTER

     The March data from the state Employment Development Department (EDD) was nothing to write home about.  Nonfarm employment in California declined over the year by 0.5% or by 71,200 jobs.  As usual, manufacturing took the biggest hit dropping by 123,600 jobs.  Transportation-communications-public utilities lost 31,400, services was down by 20,500, and wholesale trade was off by 7,600 jobs over the year.  Construction also moved into the loss column during March.
     In Southern California, the March EDD report contained mixed news.  Nonfarm employment in Los Angeles County slipped by 1.0% or by 42,200 jobs.  Manufacturing was down by 25,400 jobs over the year, while services declined by 19,600.  There was some excitement about the recovery in motion picture/TV production, with a February to March gain of 3,700 jobs.  However, employment in the industry was still below last year by 20,300 jobs.  In addition, the February number was revised down, with the year-to-year job loss now put at 22,400.  We know EDD undercounts jobs in the movie industry, so the latter number points to a loss of about 42,000 jobs.  However, the white location trucks are multiplying like rabbits on the streets of LA, so the April numbers should be better.
     The cheeriest job news in March came from the Riverside-San Bernardino area, where nonfarm employment increased by 3.3% or by 33,600 jobs over the year.  However, this was down from February's 4.0% advance.  And the area's manufacturing sector continued to lose jobs, off by 3,100 over the year.  In San Diego County, it was steady as she goes in March, with a 2.1% or 25,000 job gain over the year.  Here again, manufacturing employment remained weak, down over the year by 3,400 jobs.
     Job growth in Orange County slowed in March, with an increase of 0.7% or 10,100 jobs.  The County's manufacturing sector continued to shed jobs, with a loss of 9,300 over the year.  Ventura County saw nonfarm employment increase by just 0.4% over by 1,200 jobs during March.  There were year-to-year losses in construction, manufacturing and wholesale trade.
     In the Bay Area, the numbers in the March EDD report were brutal.  The Oakland area lost 12,800 jobs over the year, with the pace of job loss gaining speed.  The San Francisco area shed 45,500 jobs over the year, again with a pick-up in the rate of loss.  The San Jose area was down by 85,400 jobs.
     Based on employment, California's economy seems to be bumping along the bottom, with people wondering where any strength might come from.  Movie production is turning, and international trade activity is definitely gaining momentum.  But manufacturing and construction are still weak.  (Jack Kyser)
Cal data: http://www.calmis.cahwnet.gov/file/lfmonth/cal$pr.txt
LA Co. data: http://www.calmis.cahwnet.gov/file/lfmonth/la$pr.txt
 

U.S. RANKS IN TOP 3 IN SPENDING FOR INFORMATION TECHNOLOGY

     Survey results comparing spending for information technology  (IT) (including communications technology) in industrialized countries were released by the research arm of Germany-based Dresdner Bank.  It reveals that Sweden tops the list, spending 10.2% of its GDP on IT in 2001. The United Kingdom placed second, with its IT spending representing 9.6% of GDP and the United States ranked third with 9.4% of its GDP spent on IT.
     Close behind the top three countries in IT spending were Switzerland (9.4%) and the Netherlands (9.1%).  Perhaps the most surprising aspect of the survey was that Germany (6.8%) ranked near the bottom of the list, along with Norway (6.5%) and Italy (6.3%).  Techno-savvy Japan ranks 6th among countries, having spent 8.3% of its GDP on IT.
     For those who follow trends in productivity and their correlations with economic growth, per capita income, and living standards, these survey results are significant.  A number of economic studies have demonstrated the role of access to the Internet/world wide web, penetration of personal computer usage throughout the general population, and the efficiency-enhancing power of communications technology in supply-chain logistics and "just-in-time" inventory management.
     Keeping the U.S. in the leadership ranks among industrial countries in IT spending will, hopefully, be a high priority for the academic establishment, industry, and government.  Whether the "new economy" in the U.S. turns out to be a transitory phenomenon of the late 1990s or a permanent and evolving process depends to a considerable extent on effective utilization of information technology.  (Ken Ackbarali)
 

U.S. PRODUCER PRICES JUMPED, THANKS TO THE "BLACK GOLD"

    The U.S. Producer Price Index (PPI) for finished goods shot up by 1.0% last month, thanks to a 5.5% jump in energy costs.  Gasoline prices were 21.3% higher last month, but were still 14.7% below the year-ago levels.  Food costs increased by 0.6%.  Excluding food and energy costs, the core PPI rose by just 0.1%, reflecting the weak pricing power of producers.  The sudden rise in energy costs can hit these producers hard at a time when things are just finally turning up.  Yet prices for finished goods were still 1.4% below the year-ago level.
     The PPI for intermediate goods rose by 1.0%, also mainly due to a 5.2% increase in energy costs.  Natural gas to electric utilities was 33.9% more expensive, but was 55.1% below the year-ago price level.  Food prices rose by 0.2% and the core PPI was 0.3% higher.  Over the past year, the PPI for intermediate goods declined by 3.2%.
     The PPI for crude goods (i.e. raw materials) jumped by 4.0% last month because of a 15.2% increase in energy prices.  Natural gas prices shot up by 19.7%, but they had fallen by 20.7% in February.  Petroleum prices advanced by 16.1%, following a 13.3% increase in February.  Crude food prices actually fell by 1.3%.  The core PPI was 0.7% lower.  Compared to a year ago, the PPI for crude goods was 22.6% lower.
     The recent run-up of petroleum and gasoline prices was the result of a combination of psychological and real factors.  Iraq's 30-day oil embargo briefly stirred the fear of another oil crisis, but all other OPEC countries decided against following suit.  Iraqi oil can easily be replaced by Saudi and Kuwaiti production if needed, and most believe that the oil embargo will hurt Iraq far more than oil consumers and therefore it should not last.  Venezuela's unrest and strike were actually more relevant to the U.S. because it supplies 13% of U.S. petrol imports (Iraq supplied around 8%).  The unexpected ouster and return of President Hugo Chavez may yet cause a change in Venezuela's oil exports situation.  In any event, Venezuela's problems are seen as short-term, as compared to the Middle East conflicts.  The unrest in the Mideast brings back the dreadful memories of the 1973 oil embargo crisis.  The Bush Administration has toughened its tone on Israel partly because of concerns over oil supplies and unrest in the more friendly Arab nations.  Whether this crisis would stir up renewed calls for energy independence remains to be seen.  (George Huang)
PPI PR: http://www.bls.gov/news.release/ppi.nr0.htm
OPEC info from DOE: http://www.eia.doe.gov/emeu/cabs/opec.html
 

QUICK STATS:

* BLS: US Producer Price Index for finished goods for 3/02: +1.0% (2/02: +0.2%)
* BLS: US Producer Price Index for intermediate goods for 3/02: +1.0% (2/02: -0.1%)
* BLS: US Producer Price Index for crude goods for 3/02: +4.0% (2/02: -0.8%)
* BLS: US export prices for 3/02: +0.3% (2/02: -0.2%)
* BLS: US import prices for 3/02: +1.1% (2/02: -0.1%)
* BTM/Schroders: US chain store sales for 3/02: +6.4% over a year ago (2/02: +6.2% oya)
* Cal EDD: California unemployment rate for 3/02: 6.4% (2/02: 6.2%)
* Cal EDD: California nonfarm employment for 3/02: +68,800 (2/02: +63,100)
* Cal EDD: LA County unemployment rate for 3/02: 6.7% (2/02: 6.6%)
* Cal EDD: LA County nonfarm employment for 3/02: +19,000 (2/02: +13,300)
* Census: US retail sales for 3/02: +0.2% (2/02: +0.2%)
* Census: US business sales for 2/02: -0.9% (1/02: +0.9%)
* Census: US business inventories for 2/02: -0.1% (1/02: -0.1%)
* U. of Michigan: US Consumer Sentiment Survey for 3/02: 94.4 (2/02: 95.7)


The Economic Data Global Express (e-EDGE) is a free service of the Los Angeles County Economic Development Corporation (LAEDC). Permission to quote any proprietary part of this release is granted given proper credit. Distribution is allowed provided that no modifications are made to the original content. Sponsors of this service do not necessarily endorse all opinions stated herein. For more information, please e-mail to research@laedc.org. To contact LAEDC, please call 213-622-4300.

Subscribe to e-EDGE and receive current economic news and major developments.  Your e-mail address will not be disclosed to any outside party (including e-EDGE sponsors) under any circumstances.

To send us comments regarding e-EDGE, please e-mail to research@laedc.org.