The Economic Data Global Express (e-EDGE)

v.6 n.24       Released June 17, 2002
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

STATE/LOCAL UNEMPLOYMENT RATES LOWER IN MAY

     California's unemployment rate moved down to 6.3% last month compared to a revised 6.5% in April and March.  The state's jobless rate was 5.1% in May 2001.  This decidedly lackluster performance over the past 12 months was still a little better than the nation as a whole.  The U.S. unemployment rate has increased by 1.4 percentage points, from 4.4% to 5.8% 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 May.  All of the Southern California county unemployment rates followed this pattern last month.  Los Angeles County's jobless rate was 6.5%, down from 6.7% in April.  Orange, Riverside, and San Bernardino counties' rates all fell by 0.2 percentage points, the first to 3.6% and the latter two to 5.1%.  Meanwhile, Ventura County's unemployment rate fell from 4.5% in April to 4.2% last month.  Compared to May 2001, last month's unemployment rates were noticeably higher in Los Angeles and Orange counties, up by 1.4 and 1.0 percentage points respectively.  Riverside and San Bernardino counties both registered a smaller year-to-year increase of 0.7 percentage points, while joblessness in Ventura County increased by 0.8 percentage points.  San Diego's unemployment rate was 3.7% in May, down by 0.2 percentage points from April but 0.9 percentage points higher than last year.
     The Southern California (5-county) jobless rate has increased significantly over the past 12 months, rising by 1.2 percentage points to 5.6% last month.  In the Bay Area, the combined 9-county unemployment rate was also 5.6% last month, but this was 2.3 percentage points above the May 2001 level of 3.3%.  San Jose has experienced the worst of the area's problems.  Last month's jobless rate was 7.1%, lowest so far this year but still over twice the May 2001 rate of 3.4%.  Alameda County also registered a big increase over the year of 2.2 percentage points to 6.0%.  Unemployment rates in three other Bay Area counties rose by 1.7 percentage points over the past year to 6.3% (San Francisco), 4.5% (Contra Costa), and 4.1% (San Mateo) respectively.
     Though joblessness fell in May compared to April, unemployment continued high in most of the Central Valley. Compared to last year, however, the Central Valley's unemployment record was somewhat mixed.  The jobless rate in Sacramento County was 4.7% last month, up from 3.7% in May 2001.  Nearby, San Joaquin County's unemployment rate increased by 0.8 percentage points, to 8.7%.  Joblessness in Fresno, Tulare, and Kern counties continued high, at 12.8%, 12.9%, and 10.3% respectively.  However, Kern County's rate rose by 0.7 percentage points over the year while unemployment declined in Fresno (down by 0.3 percentage points) and Tulare County (down by 0.5 percentage points).  Finally, Imperial County's jobless rate has dropped by a whopping 3.4 percentage points over the past 12 months, but it remained highest in the state in May, at 16.2%.   (Nancy D. Sidhu)
PR: http://www.edd.ca.gov/nwsrel06.htm
 

NONFARM EMPLOYMENT MIXED IN MAY

     California's nonfarm employment continued to trace a lackluster pattern in May, based on seasonally adjusted data.  Employment declined from April to May by 9,000 jobs or by 0.3%.  Over the year, the job count was down by 51,000.  During May, only the services and government sectors posted job gains over April.
     Looking at unadjusted data (because it has more sector detail), nonfarm employment was down over the year by 0.3% or 40,700 jobs.  However, the rate of loss seems to be easing.  The biggest declines continued to be posted by manufacturing, down by 90,200 jobs, with 44,100 of the loss in aerospace.  Electronics was off by 20,900 jobs, but the pace of job loss seems to be moderating.  The service sector was down by 21,500 jobs over the year, with business services down by 54,800 jobs and motion picture production off by 23,200 (May of last year was the peak month of the strike-anticipating production rush).
     In Los Angeles County, nonfarm employment was down over the year by 0.7% or by 28,400 jobs.  Again the rate of job loss appears to be moderating, as the year-to-year loss in April was 32,000 jobs.  Manufacturing employment was down by 17,800 jobs, with aerospace off by 6,000 and apparel down by 1,800 (ironically, this industry is seeing a jump in production and can't find enough skilled  workers).   The service sector was down by 18,500 jobs, with business services off by 16,000 and motion picture production down by 20,100 (again, May 2001 was the peak).  On the good news side, year-to-year job gains were posted in transportation/communications, wholesale trade, retail trade, finance/insurance, and government.
     Nonfarm employment in Orange County during May was up by 0.6% over the year by 0.6% or by 8,500 jobs.  Here, there is a loss of momentum in evidence, as the April gain was 15,800 jobs.  The County's manufacturing sector lost 7,000 jobs over the year.  The service sector has definitely lost momentum, with a gain of only 3,200 jobs.  Losses were posted in the business services and amusement industries, while there was no change in hotels.   The Riverside-San Bernardino area continued to provide the region's main job thrust, up by 3.2% or by 33,100 jobs in May.  Again, there seems to be an easing in the pace of job growth in the area, as the gains in March and April were both over 34,000 jobs.  However, there was some good news in the area's manufacturing sector which is now in an uptrend.
     San Diego County is another of Southern California's hot spots, posting a 2.0% or 24,300 job gain over the year in May.  But again, there is that easing in momentum.  The manufacturing sector was off by 1,800 jobs, but it seems to have hit bottom.  Ventura County's nonfarm employment was unchanged over the year in May.  Better news was found in its manufacturing sector, which has added jobs over the last 2 months.
     In the 3 largest Bay Area metro areas, there were job losses over the year in May, but the worst seems to have passed.  Oakland was down by 2,700 jobs, San Francisco was off by 31,800 while San Jose declined by 54,600.  The latter was the smallest decline so far this year.  (Jack Kyser)
California data: http://www.calmis.cahwnet.gov/file/lfmonth/cal$pr.txt
LA County data: http://www.calmis.cahwnet.gov/file/lfmonth/la$pr.txt
 

G7 FINANCE MINISTERS FOCUS ON DEVELOPING COUNTRIES

     Over the weekend, the Group of Seven (G7) finance ministers met in Nova Scotia, Canada and engaged in their semi-annual review of the state of the world economy.  This group of officials also tends to set the agenda for the "heads-of-state" G8 (Russia included) meeting, scheduled to be held in two weeks, also in Canada.  Apart from a general review of macro-economic policies and conditions in the world's largest economies, the G7 focused on issues affecting developing countries.
     Some of the highlights of the session:
     -- John Manley, Canada's new finance minister, led an initiative to give more money to highly-indebted-poor countries, based on their debt-to-export ratios.
     -- Gordon Brown, the U.K.'s finance minister, and John Manley both criticized American and European protectionist actions on agricultural commodities, contending that developing countries will be adversely affected by lack of access to these large markets.
     -- Paul O'Neill, the U.S. Treasury Secretary, took some heat for American reluctance to support a World Bank plan ($4 billion) for education in poor countries.
     -- A proposal to replace some of the World Bank's lending to the poorest countries with outright grants remained unresolved.
     Based on the tenor of the G7 meeting, the upcoming G8 meeting should prove to be more than business as usual.  We shall see if developing country issues continue to receive the spotlight. (Ken Ackbarali)
 

WHOLESALE PRICE INDEX FELL IN MAY

     The U.S. Producer Price Index (PPI) for finished goods declined by 0.4% in May, thanks to a 2.3% drop in energy prices.  Energy prices had risen by 2.5% in April and 5.5% in March.  Gasoline prices, which had been the culprit for energy cost increases for a few months (+4.2% in April and +21.3% in March), fell by 9.6% last month.  The core PPI, which excludes food and energy prices, was unchanged last month.  Compared to a year ago, the PPI for finished goods declined by 2.7%.
     The PPI for intermediate goods fell by 0.5% last month, following a 0.9% rise in April.  Food prices fell by 0.8%.  Energy prices decreased by 3.2% last month, following a 4.4% rise in April.  Excluding food and energy costs, the core PPI was unchanged.  Compared to a year ago, the PPI for all intermediate goods declined by 3.1%.
     The PPI for crude goods increased by 1.7% last month, following a 5.5% rise in April.  Food prices rose by 0.4%.  Energy prices jumped by 2.2% last month, following a 22.4% jump in April.  Excluding food and energy costs, the core PPI rose by 3.4%.  Compared to a year ago, the PPI for all crude goods declined by 15.8%.  (George Huang)
PR: http://www.bls.gov/news.release/ppi.nr0.htm
 

FIRST QUARTER '02 VACANCY RATES CREEP UP

     When the 1st quarter 2002 Real Estate Research Council report arrived, we went straight to the vacancy rate data.  Office vacancy rates moved up around Southern California.  The biggest increase in Orange County, where the 1st quarter rate was 16.8%, compared with 13.4% in the 4th quarter of 2001.  Ventura County also moved up from 12.0% to 14.3% in '02's 1st quarter.  More moderate upward movement was found in San Diego County (8.2% to 9.6%) and Los Angeles County (15.0% to 15.9%).  In a bit of good news, the office vacancy rate in the Riverside-San Bernardino area declined from the 4th quarter's 14.6% to 13.8% in '02's 1st quarter.
     While Los Angeles County's overall office vacancy rate increased modestly from the 4th quarter of 2001 to the 1st quarter of 2002, two submarkets did see significant increases.  Vacancies in the South Bay went from 16.9% to 19.1%, while West Los Angeles went from 13.6% to 15.1%.  However, Central Los Angeles inched down from 17.7% in the 4th quarter of last year to 17.3% in the 1st quarter of '02.
     Industrial vacancy rates also crept up in '02's 1st quarter.  Orange County moved from 8.6% in the 4th quarter of last year to 9.7%, while the Riverside-San Bernardino area went from 7.0% to 7.7%.  San Diego County's rate went from 6.1% to 6.9%, and Ventura County moved from 8.5% to 8.7%.  In Los Angeles County, the industrial rate was essentially flat, 4.5% in the 4th quarter and 4.6% in the 1st quarter of '02.  Helping were decreases in Mid-cities (6.4% to 6.1%), South Bay (4.5% to 4.3%) and San Gabriel Valley (5.4% to 3.8%).
     In the apartment market (survey of buildings with 100 or more units), the trends from the 4th quarter of last year to the 1st quarter of '02 were mixed.  Vacancies increased in Los Angeles County (4.6% to 4.8%), Orange County (5.4% to 5.7%) Riverside County (4.2% to 4.6%), and San Diego County (4.2% to 4.9%).  However, there were declines in San Bernardino County (4.5% to 4.0%) and Ventura County (5.0% to 3.8%).  (Jack Kyser)
 

LAX AND ONT MAY TRAFFIC STILL STRUGGLING

     Total passenger traffic at LAX  was down over the year by 15.1% in May, with international activity off by 14.4%.  If you squint, you can see a modest improvement.  At Ontario International, May traffic was down by 8.7%.  Air cargo at ONT declined by 4.4% in May, after a string of gains.
     However, traffic at John Wayne Orange County Airport was up by 7.5%, the second month in a row of year-to-year gains. (Jack Kyser)
LAX data: http://www.lawa.org/statistics/tcom-0502.pdf
ONT data: http://www.lawa.org/ont/statistics/tcom-0502.pdf
 

QUICK STATS:

* BLS: US export prices for 5/02: -0.1% (4/02: +0.4%)
* BLS: US import prices for 5/02: +0.0% (4/02: +1.6%)
* BLS: US Producer Price Index for finished goods for 5/02: -0.4% (4/02: -0.2%)
* BLS: US Producer Price Index for intermediate goods for 5/02: -0.5% (4/02: +0.9%)
* BLS: US Producer Price Index for crude goods for 5/02: +1.7% (4/02: +5.5%)
* Cal EDD: California unemployment rate for 5/02: 6.3% (4/02: 6.5%)
* Cal EDD: California nonfarm employment for 5/02: +44,700 (4/02: +21,300)
* Cal EDD: LA County unemployment rate for 5/02: 6.8% (4/02: 6.9%)
* Cal EDD: LA County nonfarm employment for 5/02: +8,800 (4/02: -4,700)
* Census: US retail sales for 5/02: -0.9% (4/02: +1.2%)
* Census: US business sales for 4/02: +1.8% (3/02: +0.4%)
* Census: US business inventories for 4/02: -0.2% (3/02: -0.4%)
* Federal Reserve: US industrial production for 5/02: +0.2% (4/02: +0.3%)
* Federal Reserve: US industrial capacity utilization rate for 5/02: 75.5% (4/02: 75.4%)

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