The Economic Data Global Express (e-EDGE)

v.6 n.50       Released Dec. 16, 2002
Produced by the Los Angeles County Economic Development Corporation as a public service to the global community.

STATE/LOCAL UNEMPLOYMENT RATES MOSTLY DOWN IN NOVEMBER

     California's unemployment rate was 6.4% last month, down a little from this year's peak of 6.5% registered in October (and June, April and March).   The state's jobless rate was 6.1% in November 2001.  Meanwhile, the U.S. unemployment rate increased by 0.4 percentage points over the past 12 months, from 5.6% to 6.0%.  (These figures are all adjusted to eliminate normal seasonal variation.)
     Jobless rates at the county level are not seasonally adjusted.  Typically, November jobless rates fall in urban areas but not necessarily in areas where agriculture is important.  Los Angeles County's jobless rate was 5.8% last month, well down from the October reading of 6.2%.  Riverside County's rate dropped by 0.5 percentage points over the month to 6.1%.  Joblessness fell by 0.3 percentage points to 5.4% in San Bernardino County and by 0.2 percentage points to 3.9% in Orange County.  In Ventura County, the unemployment rate was 5.7%, up by 0.2 percentage points.  Los Angeles County's jobless rate was also well below last November's rate of 6.2%.  Unemployment rates were higher in the other four counties:  by 0.6 percentage points in Riverside County, by 0.5 percentage points in San Bernardino County, by 0.4 percentage points in Ventura, and by 0.3 percentage points in Orange County.  San Diego's unemployment rate was 4.1% last month, down from October's reading of 4.3% but 0.4 percentage points higher than last year.
     At 5.4%, the Southern California (5-county) jobless rate slipped just below last year's reading of 5.5% in November.  This was well below July's cyclical high of 6.6%.  In the Bay Area, the combined 9-county unemployment rate was 6.1% last month, a bit below October's high mark of 6.3%.  Last month's unemployment rate in the Bay Area was still 0.7 percentage points above the November 2001 level of 5.4%.  However, the year-to-year margin has been dropping for several months.  San Jose has experienced the worst of the area's problems.  Last month's jobless rate was 7.8%, down from last month's high of 8.1% but higher than the November 2001 rate of 7.0%.  San Francisco and Alameda counties both registered relatively high (6.4%) jobless rates in November.  (Nancy D. Sidhu)
PR: http://www.edd.ca.gov/nwsrel12.htm
Data: http://www.calmis.cahwnet.gov/file/lfmonth/cal1$pr.txt
 

NOVEMBER EMPLOYMENT NUMBERS -- ANY SIGNS OF LIFE?

     As was the case last month, the overall jobs report for California and its metro areas in November was less than inspiring, but there were some positive nuggets.  Total nonfarm employment in the state increased from October to November.  In addition, there was a tiny increase over the year, of 1,800 jobs.  Manufacturing continued its dismal trend, with a loss of 63,100 jobs over the year.  However, "services" saw an increase  of 4,500 jobs, the first such gain since October 2001.
     Nonfarm employment during November in Los Angeles County was down by 17,500 jobs over the year, but the differential continued to narrow.  Of note was the leveling off in aircraft & parts manufacturing.  The County's services segment also recorded an increase over the year of 3,700 jobs, the first such gain since September 2001.  Retailing lost jobs over the year (statewide, it was up, so don't expect great service at the local mall).  Employment in motion picture production eased slightly over the month, and was down by 4,200 jobs over the year.
     Orange County's year-to-year employment decline widened in November, to 4,000 jobs.  The weakest sector was manufacturing, with a loss of 5,400 jobs.  Services also posted a loss of 1,400 jobs.  The news from the Riverside-San Bernardino area  was better, with November nonfarm employment up by 25,700 jobs over the year.  The area's manufacturing sector increased over the year by 1,400 jobs.  The strongest sector was government, up by 10,800 jobs, followed by services with an increase of 7,800.  San Diego County recorded an increase of 22,400 jobs in November.  The strongest sectors here were services, up by 10,400 jobs over the year, and retailing which was up by 7,800 jobs.  After 5 months in a row of year-to-year losses, Ventura County moved back into the positive column, with a gain of 1,900 jobs in November.  Retail trade posted the largest gain of 1,600 jobs.
     In the Bay Area, job losses continued in November but they were not quite as bad as they have been in recent months.  The Oakland area was down over the year by 1,100 nonfarm jobs, the San Francisco area slipped by 23,200, while the San Jose area was down by 28,700 jobs.  (Jack Kyser)
Calif. data: http://www.calmis.cahwnet.gov/file/lfmonth/cal$pr.txt
LA County data: http://www.calmis.cahwnet.gov/file/lfmonth/la$pr.txt
 

ENLARGING THE EUROPEAN UNION--A COMPLICATED EXPERIMENT

     At this point in its evolution, the European Union gets "mixed reviews" from historians, economists, and other observers.  One has to question whether enlargement of the EU to include 10 more countries (mainly less advanced Eastern and Central European nations) will yield desired results. The agenda calls for extending membership even further to 7 Balkan states  in the not too distant future and possibly to Turkey.  If this all comes to pass, the EU will eventually consist of 33 countries instead of the current 15, with a population base of 570 million people (U.S. has 282 million), a combined GDP $9.1 trillion in year 2000 compared with $9.6 trillion for the U.S., and an average $18,250 in GDP per capita versus $34,100 for the U.S.
     This monumental expansion of the EU may have many merits, but it is also fraught with many challenges and issues.  Although there are considerable differences between the current 15 EU member countries, e.g. Germany and Greece or Ireland and Norway, many common values and traditions make them somewhat homogeneous.  When the 10 "enlargement countries" join the EU, the range of disparities will widen considerably as to stage of economic development, living standards, free market economic systems, and public institutions.  This is bound to raise the level of stresses and strains inherent in making the euro work as a common currency, adhering to fiscal discipline, and reaching agreement on other economic policy issues.
     It is somewhat ironic and not a little puzzling that the European Parliament and the Secretariat of the EU have decided to move ahead posthaste with the enlargement experiment at this time.  EU economic growth is stalling out and its "powerhouse" economy, Germany, is on the cusp of a recession or worse. Germany, France, and Portugal are already incurring budget deficits in excess of 3% of GDP--in violation of  the Stability and Growth Pact limit, and international trade tensions with the United States are escalating.  Also, the prospect of the United Kingdom (the largest of the four EU countries that remain outside of the Euro zone) adopting the euro and becoming fully integrated with the Continent has dimmed.
     After nearly four years since the adoption of the euro (January 1999), the complications surrounding monetary and fiscal policies, labor market restructuring, weak productivity, and huge disparities in per capita income persist and plague leaders of this noble experiment. Enlargement of the EU is ambitious and perhaps farsighted, but the road ahead is not going to be smooth sailing.  (Ken Ackbarali)
 

WHOLESALE PRICES FELL IN NOVEMBER, THANKS TO CHEAPER GASOLINE

     The US Producer Price Index (PPI) for finished goods, also known as the wholesale price index, fell by 0.4% in November, the first month-to-month drop since July.  The decline came from a 1.8% drop in energy prices and a 0.3% decline in the core prices, which excludes volatile food and energy prices.  Food prices rose by 0.3%.  Wholesale gasoline prices fell by 9.0% in November after rising by 17.9% in October, but they were still 29.6% above the Nov. 2001 level.  Other items scoring significant declines include fuel oil (-11.1%), passenger cars (-3.6%), and sporting goods (-3.1%).  Compared to a year ago, the PPI for finished goods was 0.9% higher in November.  This is the second consecutive month of positive year-over-year increases.
     The PPI for intermediate goods declined by 0.1% in November, after a 0.7% increase in October.  Food prices rose by 0.5%.  Energy prices dropped by 1.5%.  The core PPI rose by just 0.1%.  Compared to a year ago, the PPI for intermediate goods was 2.5% higher.
     The PPI for crude goods (i.e. raw materials) rose by 5.1% in November, following a 3.4% increase in October.  Food prices fell by 0.1%.  Energy prices increased by 13.1%, thanks to a 37.9% jump in natural gas prices.  Crude oil prices, in contrast, fell by 13.5%.  Natural gas prices were 54.5% higher than a year ago, while crude oil prices were up by 30.6%.  The core index rose by 0.4%.  Compared to a year ago, the PPI for crude goods was 14.7% higher in November.  (George Huang)
PR: http://www.bls.gov/news.release/ppi.nr0.htm
 

 OCTOBER HOTEL OCCUPANCIES

     The October hotel industry data from PKF Consulting were a mixed bag.  In Los Angeles County, occupancy for the month was 69.7%, compared with a very weak October 2001 reading of 59.8%.  The average daily room rate (ADR) increased by 0.7% over the year to $115.81.  Around the County, the strongest sub-markets in October were the South Bay at 77.1% occupancy, and Valencia at 75.7%.
     The October hotel occupancy rate in Orange County was 66.0%, compared with 57.1% last year.  The ADR advanced by 1.1% to %107.62.  The strongest sub-markets were South County at 68.6%, and Orange County Airport at 68.4%.
     For those who must have a touch of winter in their holiday season, there is an ice skating rink in downtown Los Angeles, and it snows nightly at Disneyland.  (Jack Kyser)
 

ENERGY WATCH

     Last week, an administrative law judge told the Federal Energy Regulatory Commission (FERC) that California was overcharged about $1.8 billion by power producers during the energy crisis, and California can deduct that amount from its $3 billion in unpaid power bills.  California has claimed it was overcharged by $8.9 billion and will likely appeal.  The judge's recommendation covers only a specific timeframe (10/2/2000-6/20/2001) and certain kinds of transaction, and $2 billion was the maximum amount of "overcharge refund" that could have be authorized under these conditions.  The State can seek higher refunds by asking the FERC to extend the timeframe of the alleged overcharging and to cover other types of transactions.  The $3 billion in unpaid power bills are mostly funded, and so they will not affect future power bills or the State's General Fund.  The difference ($1.2 billion) could be returned to power consumers.
     Some other ongoing developments include:
     - Another admin. law judge is investigating whether El Paso Corp., the dominant natural gas supplier and transporter to Southern California, illegally restricted natural gas transport capacity to artificially inflate natural gas prices.  Natural gas is the fuel for most of the power plants in California.  California could get up to $1 billion if the case is proven.
     - Utilities are scheduled to resume purchases of power starting January 1, 2003.  The State's Dept. of Water Resources (which operates hydroelectric dams) has been buying power on behalf of the utilities after they became financially strapped and could not get funding from the capital markets.
     LAEDC's spring 2001 report on the power crisis covered the original factors behind the power shortage, including the growing use of natural gas-powered generators.  It does not, however, cover the later developments and governments' responses to the initial crisis.  (George Huang)
FERC PR: http://www.ferc.gov/electric/bulkpower/birchman-12-12-02.pdf
CPUC's response: http://www.cpuc.ca.gov/PUBLISHED/NEWS_RELEASE/21882.htm
LAEDC's power crisis report (dated spring 2001): http://www.eedge.org/electricity/powercrisis.pdf
 

NEED CAPITAL FOR YOUR TECH VENTURE?

     If your company is involved in the development of innovative and cutting-edge, proprietary, ready for market technology, we have an event for you to reach potential investors.  The 9th annual Venture Forum (formerly the Southern California Technology Venture Forum) will be held on Thursday, April 3, 2003, at the Regent Beverly Wilshire in Beverly Hills.  It's a place where venture capitalists and other investors meet entrepreneurs.  Companies chosen to present will get intense mentoring by our group of industry and financial experts so they'll be ready to attract investors.  In the past 8 years, over $500 million of investment were generated as a result of these conferences.  The application deadline for presenting companies is January 8, 2003.  Please see http://www.theventureforum.com/Presenters_Apply.htm for more details.  The website for the conference is http://www.theventureforum.com .
 

HOLIDAY SHOPPING TIPS

     Here are some tips to help you get through the holiday shopping season...
     - California law prohibits most types of gift certificates issued after 1/1/1997 from expiring.  (Please see CDCA's PR: http://www.dca.ca.gov/press_releases/20001214.htm)
     - Use credit cards with free extended warranty programs for durable items such as electric appliances.  Use gift cards that you receive for non-durable items.
     - Online purchases are not always cheaper, and so research carefully for big-ticket items.  Make sure you know the return policies and options for you or the gift's recipient.
     - Use a shopping comparisons website (e.g., http://www.bestwebbuys.com) to simplify comparison shopping.  Search for coupons online before making the purchase (e.g., ask the browser to search for "BN coupons" to find coupons for Barnes & Noble).
     - Can't find your newspaper ads?  Use http://www.salescircular.com to see many local sales circulars by State and product categories.
     Happy holidays, and thanks for keeping the economy rolling.  (George Huang)
 

2002 ECONOMIC CENSUS LAUNCHED

    The Economic Census, which is done every five years, is an important source of business data for government agencies, economic development & research institutions (such as LAEDC), and private businesses.  The 2002 Economic Census forms will be mailed out in the coming weeks, and we encourage all recipients to accurately report their business information.  All firms' data are kept confidential.  Your participation helps LAEDC do its job and fulfill its mission of serving the business community.
PR: http://www.census.gov/Press-Release/www/2002/presskit_2002_EconomicCensus.html
 

TRYING TO REACH SMALL AND MID-SIZED BUSINESSES?

     LAEDC may have the right channel for you.  LAEDC's Business Resource Guide (BRG) is full of free resources that serve small and mid-sized businesses and is seen as an indispensable reference book for these businesses.  An advertisement in the BRG can reach these businesses at a fraction of the cost of radio and billboard ads.  Our 2003 edition is nearing completion and a few ad spots are still available.  Please call Beverly Dill at 213-236-4820 or e-mail to bdill@laedc.org for more information.
 

VARIOUS EVENT CALENDARS

     To prevent the e-EDGE from listing too many events, we encourage you to visit our events pages:
LAEDC events: http://www.laedc.org/data/events/index.shtml
World Trade Center Association events: http://www.wtcanet.org/index_event.htm
LAEDC's economic development-related events: http://www.laedc.org/events/calendarevent.asp
 

TRADE SHOWS LISTINGS (Repeat announcement)

     LAEDC is now compiling a comprehensive listing of trade shows in Southern California.  Please send us such information.  Thank you so much.
     Our current listing includes fashion/apparel, textiles, shoes, home furnishings & giftware, and manufacturing.  It's available at http://www.laedc.org/trade_shows.html
 

QUICK STATS:

* BEA: US current account deficit for 3Q02: US$127.0 billion (2Q02: $127.6bil.)
* BLS: US Producer Price Index for finished goods for 11/02: -0.4% (10/02: +1.1%)
* BLS: US Producer Price Index for intermediate goods for 11/02: -0.1% (10/02: +0.7%)
* BLS: US Producer Price Index for crude goods for 11/02: +5.1% (10/02: +3.4%)
* BLS: US export prices for 11/02: +0.1% (10/02: -0.1%)
* BLS: US import prices for 11/02: -1.0% (10/02: +0.0%)
* Cal EDD: California unemployment rate for 11/02: 6.4% (10/02: 6.5%)
* Cal EDD: California nonfarm employment for 11/02: +40,700 (10/02: +32,000)
* Cal EDD: LA County unemployment rate for 11/02: 6.0% (10/02: 6.2%)
* Cal EDD: LA County nonfarm employment for 11/02: +17,100 (10/02: +13,300)
* Census: US retail sales for 11/02: +0.4% (10/02: +0.1%)
* Census: US business sales for 10/02: +0.4% (9/02: -0.7%)
* Census: US business inventories for 10/02: +0.2% (9/02: +0.6%)
* Census: US wholesale trade for 10/02: -0.1% (9/02: -0.2%)
* Census: US wholesale inventories for 10/02: -0.3% (9/02: +0.4%)
* Univ. of Michigan: US Consumer Sentiment Survey for 12/02: 87.0 (11/02: 84.2)

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.

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