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Saturday, Jun. 20, 2009

Unemployment continues to dip

Shallow decline follows valley's traditional pattern; Stanislaus uptick seasonal

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For the second month in a row, Stanislaus and most of its surrounding counties saw slight decreases in their unemployment rates, the state Employment Development Department reported Friday.

The small dips in May follow a historical decline in unemployment for that month, driven largely by an increase in agricultural work.

Stanislaus County fell from 16.8 percent in April to 16.3 percent in May. But the county's May unemployment rate still is considerably higher than the same time last year, when it was 10.5 percent.

San Joaquin County dropped from 15.6 percent in April to 15 percent in May, Merced from 18.3 percent to 17.3 percent, Tuolumne from 12.2 percent to 11.9 percent and Mariposa from 11.3 percent to 10.2 percent.

Calaveras was the only area county to show an increase, from 13.5 percent to 13.6 percent.

In Stanislaus County, the numbers reflect the seasonal spike in farm work. That goes hand in hand with an increase in manufacturing jobs, primarily in food processing.

While the counties in the Northern San Joaquin Valley and foothills showed improvement, the unemployment rate for the state didn't, climbing to 11.5 percent in May, the highest in modern record-keeping, and up from 11.1 percent in April.

Still, experts caution against reading too much into the Northern San Joaquin Valley's small employment gains in the past two months.

The vast majority of jobs added — some 2,900 out of 3,500 total — came in farming.

"This time of year the agricultural activity increases and jobs are created as a result of that," said Stanislaus Alliance Worknet Director Jeff Rowe.

"Unfortunately, I don't see anything that would indicate there is any improvement in the economy in general. You have to look at the unemployment rate a year ago today and what it was then. When that gap starts to decrease, then maybe we have some room for optimism."

But Liz Baker, a labor market analyst for the Employment Development Department, said several industries kept up with their past averages, including construction, which added 300 jobs, and manufacturing, which added 200.

She said the construction numbers, which also increased last month, could be seen as a positive sign, given the heavy hits the building industry has taken during the recession.

But construction and farming tend to follow seasonal spikes in the warmer months.

She said it would take more movement in the nonseasonal industries and a rise in consumer confidence to indicate the start of a larger turnaround for the area.

"We're just not sure, a lot will hinge on the state of the economy and whether consumer confidence increases," Baker said. "When you see consumer confidence increase and people start to buy, the manufacturers and retailers will open up businesses and start to hire."

Historically, April and May have been spike months in the area's employment, while June brings a dip to be followed by a climb in July and August.

All the counties continue to have significantly higher unemployment rates than a year ago, from 3 percentage points to 6 percentage points. This means the tight and highly competitive job market persists, something job seekers are all too aware of.

Sonora resident Joseph Day, a medical researcher who lost his job a year ago when the physician he worked for closed his practice, said jobs are "nonexistent."

"Even across the state, I've had trouble when I put in my résumé, it drops into a black hole," said the 50-year-old who has a doctorate in biophysics.

The length and depth of the recession has meant that almost every industry has been touched, affecting the entire work force.

"We are now in a stage of the recession where it is so pervasive and widespread that nothing is being spared," said Jeff Michael, Business Forecasting Center director at the University of the Pacific in Stockton.

The state's budget crisis also could greatly impact any recovery and adds uncertainty to employment in education and local and state government.

"Clearly there is bad news coming in those areas, but it's not clear how bad," Michael said. "And that will be really important going into next year."

For industries that did see an uptick, such as manufacturing, the best indicator will be what sort of manufacturing jobs are being created.

Rowe of the Alliance Worknet said when nonfood-related manufacturing starts to improve in the area, it could be a sign the area may see the beginnings of a real rebound.

"If we see that start to improve, that is a good indication that people are starting to spend money and buy the products that are being produced, which is an indication people in general are better off economically," he said. "That would be a general positive sign that I would be looking for that the economy is starting to get better."

Bee staff writer John Holland contributed to this report.

Bee staff writer Marijke Rowland can be reached at mrowland@modbee.com or 578-2284.