California unemployment rate steady at 7.7 percent

The closely watched University of California, Los Angeles' Anderson Forecast last month predicted that unemployment will continue to increase in coming months as consumers snap shut their purses.

"We're at the end of the housing-driven recession but at the beginning of the consumer-driven recession," said Stephen Levy, director and senior economist at the Center for the Continuing Study of the California Economy in Palo Alto. "The job losses are continuing at about 10,000 a month. No way is this leveling off."

He predicted Friday that the state could see the unemployment rate climb to around 9 percent as the economic downturn lingers for a year.

Tax revenues will continue to fall as one consequence, further damaging a weeks-old state budget already projected to be more than $1.3 billion in the red. State leaders have begun considering more cuts in services, while some legislators are suggesting tax increases.

Unemployment is still lower than the early 1990s recession, when the rate climbed to nearly 10 percent. The rate fell below 5 percent early in the new century and before the housing bubble burst.

The state survey estimates that 1.425 million people were unemployed in California last month. That's up by 4,000 over August, and up nearly 400,000 from September 2007, when the state jobless rate was 5.6 percent.

Of the unemployed, the state says 548,300 people were laid off while 133,800 left their jobs voluntarily.

California, which accounts for about 11 percent of the nation's jobs, tied in August for the nation's third highest unemployment rate, behind Michigan and Rhode Island. September's state-by-state breakdown by the U.S. Bureau of Labor Statistics won't be released until Tuesday.

With the ongoing housing and credit slumps, construction and financial jobs were among six categories that together lost 18,800 jobs in September, the state reported.

"Those are the two weaker areas, although it looks like the construction job loss eased since the first five months of the year. At least that appears to be slowing down," Callori said. The job loss trend accelerated in the financial sector, however.

Overall, though, the categories of trade, transportation and utilities were the biggest losers in September, down by 6,300 jobs.

Since a year ago, construction, manufacturing and financial jobs are down nearly 176,000 jobs. Construction accounted for the biggest chunk of that number, down 8.7 percent or nearly 77,000 jobs.

The overall unemployment numbers include agricultural workers and the self-employed. A smaller sampling of non-farm employers found a decline of 11,600 jobs during September and a drop of 77,200 jobs since a year ago.

Meanwhile, five categories including manufacturing, teaching and health services saw a combined increase of 7,200 jobs in September and nearly 99,000 from a year ago.

Despite the foundering economy, the state survey of employers found that more than 15 million Californians were employed, excluding farm workers.

A smaller federal survey of overall jobs estimated that more than 17 million California residents had jobs in September. The federal survey said that was an increase of 73,000 jobs since August but a loss of 150,000 jobs since September 2007.

More than a half-million Californians received unemployment insurance benefits in September. That was a slight decline from August but a significant increase from the more than 345,000 getting benefits a year ago.

New unemployment claims of 53,418 were up slightly from August and up sharply from less than 40,000 claims in September 2007.

Gov. Arnold Schwarzenegger today offered $2 million in federal job training funds to Los Angeles, Ventura and San Bernardino counties to help residents who lost their jobs because of
the recent wildfires. He also suspended the usual unemployment benefits waiting period for workers who lost jobs because of the fires.