California’s December employment report was mixed at best. There was a 15,500 job increase over November, and the October-November gain was revised up from 900 jobs to 2,700 jobs. But the jump in the state’s December unemployment rate to 6.1% really unnerved people.
The state saw nonfarm employment increase by 0.5%, or by 79,300 jobs, over the year to December. This can be compared with January 2007, when nonfarm employment rose by 1.9% or 284,800 jobs. The best growth over the year to December came in government (+48,200 jobs), health services (+41,500 jobs), leisure & hospitality services (+29,800 jobs), and professional, scientific & technical services (+25,500 jobs). The biggest losses over the year to December came in construction (-37,300 jobs), retail (-23,800 jobs), finance & insurance
(-21,200 jobs) and manufacturing (-14,300 jobs). The preliminary 2006-2007 employment increase for the state was 187,300 jobs.
Los Angeles County saw December employment growth of 0.7% or 30,500 jobs. The biggest increases over the year came in leisure & hospitality services (+11,300 jobs), health services (+9,800 jobs), education services (+7,900 jobs), and government (+7,700 jobs). The largest losses were in manufacturing (-6,400 jobs), construction (-4,800 jobs), and retail (-4,600 jobs).
What about motion picture & sound recording employment? Despite the WGA strike, there was a modest gain of 800 jobs from November to December, while the over the year increase was 4,100 jobs. In 1988, the employment loss during the first month of the WGA strike was 10,000 jobs. The preliminary 2006-2007 employment increase for Los Angeles County was 40,600 jobs.
Orange County continued to struggle during December, with nonfarm employment down by 0.4% or by -6,600 jobs over the year. The best gains came in government (+3,700 jobs), health services (+2,100 jobs) and manufacturing (+800 jobs). The largest losses over the year came in finance & insurance (-9,700 jobs) and construction (-4,800 jobs). The preliminary 2006-2007 employment increase for the County was a modest 5,200 jobs).
The Riverside-San Bernardino area saw December employment growth slow to 2.5% or 32,400 jobs. The largest gains over the year came in health services (+5,400 jobs), leisure & hospitality services (+5,100 jobs) and administrative services (+5,000 jobs). The preliminary 2006-2007 employment increase for the area was 42,300 jobs.
San Diego County’s nonfarm employment during December rose by 1.1% or by 14,600 jobs over the year. The best gains over the year came in professional, scientific & technical services (+4,000 jobs), health services (+3,500 jobs) and leisure & hospitality services (+3,300 jobs). The most notable loss was in construction (-4,100 jobs). The preliminary 2006-2007 employment increase for the County was 10,700 jobs.
In Ventura County, December nonfarm employment crept up by 0.2% or by 500 jobs. The best gains were in health services (+1,000 jobs), government and leisure & hospitality services (+800 jobs each). The largest loss was -800 jobs in construction, followed by administrative services and manufacturing (-700 jobs each). The preliminary 2006-2007 employment increase for the County was 2,900 jobs.
The December employment numbers for the Bay Area metros were mixed. The Oakland metro area saw growth over the year ease to 0.2% or just 2,300 jobs. In San Francisco, December nonfarm farm employment rose by 1.6% or by 15,500 jobs. In the San Jose area, there was an increase of 1.4% or 12,800 nonfarm jobs.
The next employment report for the state and metro areas will not come until February 29, when we will get the revised numbers for 2006 and 2007. This revision could be very interesting as the state “Interim Employment Series” indicates downward revisions in several industries. (Jack Kyser)
California data: http://www.calmis.cahwnet.gov/file/lfmonth/cal$PDS.pdf
LA County data: http://www.calmis.cahwnet.gov/file/lfmonth/la$PDS.pdf
Orange County data: http://www.calmis.cahwnet.gov/file/lfmonth/oran$PDS.pdf
Riverside-San Bernardino data: http://www.calmis.cahwnet.gov/file/lfmonth/rive$PDS.pdf
Ventura County data: http://www.calmis.cahwnet.gov/file/lfmonth/vent$PDS.pdf
The California Employment Development Department (EDD) released December unemployment estimates last week. Seasonally adjusted, the Los Angeles County unemployment rate was 5.6%, up from 5.3% in November, from 5.1% in October, and from 4.5% a year earlier. December was the seventh consecutive month that the County’s unemployment rate increased over the previous year. Last month’s year-over-year increase of 1.1 percentage point in the County’s unemployment rate was the largest since June 2002 (which was up by 1.5 percentage points to 7.1%). Last month’s County unemployment rate was the highest since March 2005 (also 5.6%).
California’s seasonally adjusted jobless rate for last month was 6.1%, up from 5.6% in both November and October, and up from 4.8% a year earlier. The state’s December unemployment rate was the highest since September 2004 (also 6.1%). Los Angeles County’s adjusted unemployment rate has remained at or below the state rate for 21 of the last 22 months. By way of comparison, the seasonally adjusted U.S. unemployment rate was 5.0% in December, up from 4.7% in November, from 4.8% in October, and from 4.4% a year earlier.
The combined five-county area unemployment rate rose by +1.2 percentage point from December 2006 (to 5.3%). The jobless rate increased by +1.7 percentage points in Riverside County (to 6.6%), by +1.5 percentage points in San Bernardino County (to 5.9%), by +1.4 percentage points in Ventura County (to 5.7%), and by +1.2 percentage points in Orange County (to 4.3%). The seasonally unadjusted unemployment rate in Los Angeles County increased by +1.0 percentage point over the last 12 months to 5.2%.
San Diego’s unemployment rate was 4.9% in December, up by +1.2 percentage point from a year earlier.
The Bay Area's combined unemployment rate (seasonally unadjusted) increased by +1.0 percentage point to 4.8% in December. Over the last 12 months, joblessness increased by +1.1 percentage points in the Oakland-Fremont-Hayward Metropolitan Division (to 5.0%), by +1.0 percentage points in the San Jose-Sunnyvale-Santa Clara Metropolitan Statistical Area (to 5.1%), and by +0.8 percentage points in the San Francisco-San Mateo-Redwood City Metropolitan Division (to 4.2%). (Eduardo J. Martinez)
Seasonally adjusted employment
| Area | Current Mo. | Current - 1 | Current - 2 | Current -12 | M/M Chg | Y/Y Chg |
| United States | 5.0% | 4.7% | 4.8% | 4.4% | 0.3 | 0.6 |
| California | 6.1% | 5.6% | 5.6% | 4.8% | 0.5 | 1.3 |
| Los Angeles Co. | 5.6% | 5.3% | 5.1% | 4.5% | 0.3 | 1.1 |
Not seasonally adjusted employment
| Area | Current Mo. | Current - 1 | Current - 2 | Current -12 | M/M Chg | Y/Y Chg |
| United States | 4.8% | 4.5% | 4.4% | 4.3% | 0.3 | 0.5 |
| California | 5.9% | 5.6% | 5.4% | 4.6% | 0.3 | 1.3 |
| Los Angeles Co. | 5.2% | 5.2% | 5.0% | 4.2% | 0.0 | 1.0 |
| Orange Co. | 4.3% | 4.2% | 4.2% | 3.1% | 0.1 | 1.2 |
| Riverside Co. | 6.6% | 6.4% | 6.5% | 4.9% | 0.2 | 1.7 |
| San Bernardino Co. | 5.9% | 5.7% | 5.7% | 4.4% | 0.2 | 1.5 |
| Ventura Co. | 5.7% | 5.4% | 5.2% | 4.3% | 0.3 | 1.4 |
| San Diego Co. | 4.9% | 4.8% | 4.8% | 3.7% | 0.1 | 1.2 |
| Oakland MD | 5.0% | 4.9% | 4.9% | 3.9% | 0.1 | 1.1 |
| San Francisco MD | 4.2% | 4.1% | 4.1% | 3.4% | 0.1 | 0.8 |
| San Jose MSA | 5.1% | 5.0% | 4.9% | 4.1% | 0.1 | 1.0 |
PR: http://www.edd.ca.gov/urate200710.pdf
Data: http://www.calmis.cahwnet.gov/file/lfmonth/CalPR.pdf
Retail and restaurant sales slacked off in December after a very strong performance in November. Retail and food services sales fell by -0.4% last month, after growing by +1.0% the previous month. Sales were decidedly mixed last month, with six categories reporting lower sales last month and six recording higher sales. Leading the upside were nonstore retailers (Internet and catalog houses, +1.0%), miscellaneous store retailers (also +1.0%), food & beverage stores (+0.7%), and health & personal care stores (also +0.7%). Categories reporting lower sales in December included building material & garden equipment & supplies dealers (-2.9%), apparel & accessories stores (-2.0%), sporting goods, hobby, book, & music stores (-2.0%), electronics & appliances stores (-1.9%), gasoline stations (-1.7% due to lower prices), and motor vehicle & parts dealers (-0.4%).
For 2007 as a whole, total retail & food services sales increased by +4.2% compared to 2006, and were up by +4.6% excluding automotive. Nonstore retailers continued to be the growth leader, with full-year sales up by +9.5%. Gasoline stations ranked second, with 2007 sales up by +6.0%. Food & beverage stores and health & personal care stores shared the number three spot (with sales up by +5.7%). Sales of two retail sectors lagged throughout the year: building material & garden equipment & supplies dealers closed the year -1.3% in the red, while sales of department stores fell -1.4% behind last year.
Recent changes in month-to-month retail sales have been affected by swings in gasoline prices, automotive sales incentives, and the plunge in housing activity. To gauge what’s going on in “the real retail” sector, many industry analysts also estimate “core” retail sales. Defined here as total retail & food service sales minus automotive dealers, gasoline stations, and building materials etc. dealers, the recent performance of core retail is instructive. Core retail sales rose by +0.2% in December following a healthy gain of +0.8% in November. Core retail sales were up by +5.2% during 2007. These will be the figures to watch in upcoming monthly reports. (Nancy D. Sidhu)
PR: http://www.census.gov/svsd/www/fullpub.html
The U.S. Census Bureau reported last week that U.S. housing starts declined by -14.2% in December to 1.01 million units (seasonally adjusted annual rate or SAAR), after dropping by -7.9% in November. Construction was started on about 794,000 single-family homes in December, down by -2.9% from November—and the lowest level for single-family starts since March 1991. In the multi-family sector (apartments and condominiums), some 212,000 units were started last month, a dramatic plunge (-40.3%) from 355,000 units in November.
Total housing starts peaked back in January, 2006 at 2.29 million units, according to the Census Bureau. Starts reached another new low for this downturn in December, and were down by -53% from the peak quarter (1q2006). Single-family and multi-family starts were down by -55% and -44% respectively.
The underlying fundamentals in the housing industry continue to be negative. The latest monthly survey of homebuilder attitudes taken by the NAHB (National Association of Home Builders) continued near the record low level set in November (data go back to 1985). About four-fifths of the builders reported slow sales, and 86% complained about low buyer traffic. Expectations for future sales also remained dismal.
Lenders’ stricter standards for granting all types of mortgages haven’t helped the situation. As a result, it’s become harder and harder for would-be homebuyers to find mortgages at favorable rates, especially subprime and jumbo loans. Most builders and industry observers expect housing construction activity to move down some more from here. They disagree though on how much farther starts will fall and how long it will take until the bottom is reached. The “optimists” expect the trough will be reached this spring, while the “pessimists” forecast declining starts throughout 2008 with a bottom in 2009. (Nancy D. Sidhu)
PR: http://www.census.gov/const/www/newresconstindex.html
The Producer Price Index (PPI) for finished goods fell slightly, by -0.1%, in December, following a +3.2% increase in November. The food price index increased in December, up by +1.3% and up by +7.4% from December 2006. Within the food group, fresh fruits (+16.0%) and fresh and dry vegetables (+13.4%) increased the most. Over the year, eggs and dairy product wholesale prices went up significantly, rising by +56.4% and +23.7%, respectively.
Wholesale energy prices dipped a bit during December, down by -1.9% (following a sharp increase of +14.1% in November) but were up by +18.4% (unadjusted) from December 2006. Wholesale gasoline prices increased by -4.8% in December and were up by +37.1% from a year ago. Home heating oil and distillates prices dropped a bit by -0.1% from November but were up by +30.9% over the year. Excluding food and energy, the core finished goods index was up by +0.2% in December and up by +2.0% from December 2006. The total finished goods index was up by +6.3% over the past year.
The PPI for intermediate goods decreased a bit, by -0.2%, in December, following a +3.7% increase in November. Intermediate food prices rose by +2.2% in December. Farmers saw their costs increase with prices of fertilizers, energy, and feeds all higher during the month and over the year. Intermediate energy prices were down by -1.4% in December, following a big increase of +13.3% in November. Within energy, industrial natural gas and jet fuels both increased by +3.4% during December. Excluding food and energy prices, the core index for intermediate goods remained unchained during the month of December, after climbing by +1.0% in November. The core intermediate goods index has risen by +3.3% over the past 12 months. Compared to a year ago, the overall intermediate goods index was up by +6.8%.
The PPI for crude goods rose by +1.0% in December, following an +8.7% increase the previous month. Crude food prices were up by +4.3% in December. Energy prices declines by -0.7% in December, following a +17.0% increase in November. Excluding food and energy prices, the core index for crude goods were unchanged in December, following a -0.5% decrease in November. Compared to a year ago, the overall crude goods index was up by +20.6%. (Candice F. Hynek)
PR: http://www.bls.gov/news.release/ppi.nr0.htm
The Los Angeles area (LA-Riverside-OC) Consumer Price Index (CPI) declined by -0.3% in December, following a +0.6% increase in November. The overall index was +4.2% higher than a year ago and up by +3.3% for the whole year 2007. Local CPIs are not seasonally adjusted. Food prices rose by +0.1% last month, with grocery prices up by +0.4%. Transportation prices were lower, down by -1.3% over the month, but up by +7.5% over the year. Gasoline prices decreased by -2.1% over the month, following a +9.0% increase in November, and were up by +28.7% over the year. Medical care costs were a tad higher, up by +0.9% in December and up by 3.3% a year ago.
The U.S. Consumer Price Index (CPI) rose by +0.3% in December (seasonally adjusted), compared with a +0.8% increase in November. The CPI was up by +4.1% over the year, way above the Fed’s “comfort zone”. Food prices were unchanged in December but were up by +2.3% from December 2006. Though dairy product prices (including milk, cheese, ice cream, etc.) declined by -0.4% last month, they were up by +13.4% over the year. Milk prices were significantly higher, making it harder for families with children, up by +19.3% from December 2006.
Energy prices rose by +0.9% during December, following a +5.7% increase in November, and were up by +17.4% over the year. Gasoline prices rose by +1.1% in December and were up by +29.6% from a year ago.
Excluding food and energy prices, the core CPI rose by +0.2% in December, following a +0.3% increase the previous month. The core index has risen by +2.4% over the past year. Medical care costs rose by +0.3% compared with a +0.4% increase in November, and were up by +5.2% from a year ago. (Candice F. Hynek)
US PR: http://www.bls.gov/news.release/cpi.nr0.htm
LA PR: http://www.bls.gov/ro9/cpilosa.htm
The value of exports at the Los Angeles Customs District during November rose by 10.4% over the year, while import values recorded a 5.8% gain. Total two-way trade values increased by 7.0% compared to November 2006, to $30.4 billion. The 11-month total of $319.6 billion was 5.9% ahead of the comparable 2006 period.
At the San Francisco district, export values in November were up by just 0.5% over the year, while imports rose by 7.6%. The month’s total two-way trade value rose by 4.8% to $9.7 billion. The 11-month total was 1.4% ahead to $102.9 billion.
At the San Diego district during November, export values declined by -1.0%, but imports jumped by 11.6%. The month’s total two-way trade value rose by 8.0% to $5.1 billion. The 11-month total was up by 7.0% over the comparable 2006 period to $49.9 billion. (Jack Kyser)
The year 2007 closed out on a disappointing note, with the number of import containers handled at the Los Angeles/Long Beach port complex during December down by 3.3% over the year. However, the export container count rose by 20.6%. The number of empty containers handled by the two ports during December declined by 19.6%. For the month, a total of 1,236,757 containers was handled, down by 3.9% over the year.
For the year 2007, the number of imports containers moved at Los Angeles/Long Beach eased by -0.2% to 8.1 million TEUs, while the export container count zipped ahead by 17.2% to nearly 3.2 million TEUs. The number of empty containers was down by -10.3% to nearly 4.4 million TEUs. For the year, the total number of containers handled at the twin ports was down by -0.6% or by -92,841 units to 15,667,478 TEUs.
The December trend at the port of Oakland was a little different. Import containers rose by 0.9% while the export container count rose by 10.0%. The number of empty containers handled was up by 19.0%, and the total number of containers moved at Oakland during December was up by 7.0% to 193,332 TEUs.
For the year, Oakland recorded a -1.1% decline in import containers, an 8.6% increase in export containers, and a -9.8% decline in empties. The 2007 total for the port was down by -0.2% to 2,388,182 TEUs. (Jack Kyser)
Port of LA data: http://www.portoflosangeles.org/factsfigures_Monthly.htm
Port of Long Beach data: http://www.polb.com/about/port_stats/latest_month.asp
Port of Oakland data: http://www.portofoakland.com/maritime/facts_cargo.asp
Passenger traffic numbers at the region’s airports during November were not bad. At LAX, total traffic was up by 1.1% over the year, while the international segment moved ahead by a robust 8.1%. At Los Angeles/Ontario International, total traffic rose by a modest 1.7%, with a decline of -37.0% in the international segment. The Palmdale Regional Airport handled 1,854 passengers during November.
Bob Hope Airport recorded a 2.6% increase in traffic over the year to November. However, John Wayne/Orange County Airport saw its passenger count drop by -1.8% during the same period. The Long Beach Airport had a 2.2% increase, while Palm Springs International bounced back in November, with an 8.9% gain over the year.
Air cargo tonnage at LAX during November rose by 2.5%, but Ontario saw a -4.0% decline. As to international air freight tonnage in November, LAX posted an 8.4% increase, fueled by a 10.7% increase in “arrivals.” At Ontario, tonnage crept ahead by 0.9% over the year. (Jack Kyser)
LAX data: http://www.lawa.org/lax/statistics/tcom-1107.pdf
ONT data: http://www.lawa.org/ont/statistics/tcom-1107.pdf
PSP data: http://www.palmspringsairport.com/documents/Passbymo1107.pdf
LGB data: http://www.longbeach.gov/civica/filebank/blobdload.asp?BlobID=17343
SNA data: http://www.ocair.com/newsandfacts/newsreleases/2008/NR-2008-01-17.html
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