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County's employment rate stagnant

Unemployment rates in Stanislaus County didn't budge last month, holding steady at 8.5 percent.

And if an economic forecast released Friday is any indication, the county's jobless rate probably won't change much over the next two years.

It is expected to remain around 8.3 percent through 2009, according to a quarterly report by the Business Forecasting Center at University of the Pacific in Stockton.

June's unemployment rate of 8.5 percent — the same as May — is slightly higher than the previous year, according to state Employment Development Department figures also released Friday.

But it's not the highest the county has seen in recent years, said Liz Baker, EDD labor market analyst for Stanislaus and San Joaquin counties.

That would be in 2003, when unemployment figures climbed above 10 percent.

"People are able to find jobs. Everything remained stable in the labor force," Baker said. "We are going to see some changes next month because Hershey has started their first round of layoffs this month."

The Hershey Co. laid off 99 of its 575 workers at the Oakdale plant during the first week of July as part of its plan to gradually shut down the chocolate factory. Layoffs will continue in the fall and early next year.

The situation may "not be as bad" if the vacant Hershey plant is sold quickly to another employer, Baker said, but "it depends on how successful they are in attracting other firms."

Meanwhile, the state posted a 5.2 percent unemployment rate in June. The national rate was 4.7 percent.

UOP's economic forecast points to "anemic" job growth in Stanislaus County in 2006, but predicts that it will slowly pick up.

"Modesto's economy is expected to gradually accelerate and post mild job growth that averages 1 percent per year between 2007 and 2009," the report states.

Most of those jobs will be in the service sector, namely leisure and hospitality. That's followed by professional jobs, business services, education and health, according to the report.

The manufacturing sector in Stanislaus County has posted some conflicting trends recently, according to EDD statistics.

Manufacturing was the leading source of job growth in the county in the past year, adding about 1,100 jobs, Baker said.

But between 2001 and 2007, that sector lost about 500 jobs.

"Whereas it has gone up over the year, it is shedding jobs in the long term," said Baker, who described the manufacturing job losses as consistent with national trends of outsourcing and increased mechanization.

Construction jobs down, up, down again

Construction is another sector to keep an eye on.

The slowing housing market is "definitely impacting" construction jobs in the county, Baker said.

During the housing boom in 2005, more than 14,000 people were employed in the construction industry in Stanislaus County.

That number fell to 12,800 during the beginning of this year.

"It's gone down dramatically, but it is starting to ramp up," Baker said, with about 13,600 people employed in construction last month.

The economic forecast from UOP predicts that housing starts in the state will fall this year to their lowest level since 1998.

Construction jobs will continue to suffer losses through the next few years, with the worst period in 2008, as developers build fewer new houses, the report says.

However, construction employment and housing starts should recover again by 2009, according to the UOP forecast.

Other counties in the Northern San Joaquin Valley posted mixed results for June unemployment statistics. All six counties showed higher jobless rates than the year before, but month-to-month figures varied.

The unemployment rate declined from May to June in the foothill counties of Mariposa and Tuolumne. It didn't change in Calaveras County.

San Joaquin County recorded a June unemployment rate of 7.7 percent, above the year-ago figure of 7.3 percent and higher than the previous month of 7.5 percent.

Merced dropped slightly from month to month. Its jobless rate was 9.4 percent last month, down from 9.5 percent in May.

The county's jobless rate for last month was consistent with the other counties in the region when compared with a year ago — rising from 9 percent in June 2006.

Bee staff writer Christina Salerno can be reached at csalerno@modbee.com or 238-4574.

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