Business

Job losses add up to 1 in 6 out of work

Unemployment rose in the Northern San Joaquin Valley last month, with the area's jobs prospects predictably cooling during the winter months.

Stanislaus County's jobless rate hit 17.2 percent in November — worse than one in six — just shy of its year-to-date high from March of 17.5 percent, according to data released Friday by the state Employment Development Department.

Surrounding counties also saw jumps anywhere from just shy of two percentage points in Merced to as little as 0.2 of a percentage point in Tuolumne. The rise reflects the end of the seasonal agricultural and manufacturing work as well as a drop in holiday hiring from past years.

"Typically, we see an average of about one percentage point increase from October to November, primarily due to the seasonal farming and canning industry declining," said EDD labor market analyst Liz Baker. "So that's a normal increase. What is not normal is it is at 17.2 percent."

Contributing to the abnormally high overall jobless rate was a weaker-than-average holiday hiring season. Baker said in years past the county has added about 800 seasonal jobs as Christmas approached. This year, only 400 were added.

Jeff Michael, director of the Business Forecasting Center at the University of the Pacific, said that drop off in hiring reflects retailers' cautious approach to this holiday season. Many businesses have cut back both on seasonal employees and overall inventory in anticipation of continued weak sales.

"Holiday hiring seems to be about half what it is usually," Michael said. "The plus side is that this is all temporary hiring, so hopefully the layoffs will be smaller than usual as well. But (retailers) are very conservative going into this season. We haven't turned the corner yet."

The area's jobless spikes comes as the state's unemployment rate fell slightly for November — down to 12.3 percent from 12.5 percent a month earlier. California was among 36 states that saw unemployment fall last month, but it remains among the worst-off states for jobs, tying for third-highest unemployment with Nevada and South Carolina. Only Michigan and Rhode Island were higher, according to the federal Bureau of Labor Statistics.

Despite the overall statewide improvement, California lost another 10,200 jobs in November, according to a survey of employers.

More than 2.2 million Californians were without work in November. The number does not include the nearly 500,000 workers who have taken low-paying or part-time jobs because that's all they could find, or the 111,000 people who have given up looking for work, according to the state.

The bureau says California, with the nation's highest population, also led the United States in job losses in the past year, with 617,000 jobs gone.

In Stanislaus County, the current unemployment spike still falls short of its highest point in recent history. In February 1993, the county hit 19.7 percent while in the midst of another recession.

Baker said according to historical data, the area's unemployment rate continues to climb through the winter and slowly begins to ease up in the spring, around April.

Michael said the Business Forecasting Center predicts the unemployment rate will climb close to 20 percent over the winter, peaking around February and March.

"I think that will coincide with the worst point of the recession," he said. "We are going to be uncomfortably close to 20 percent this winter."

Looming ahead for the area is the full impact of the planned March closure of the New United Motor Manufacturing, Inc. plant in Fremont. It employs about 4,700 workers, many of whom live in the valley.

"There are going to be impacts here," Michael said. "It's hard to say whether they will be enormous, but it will be something."

The center forecasts another year of high unemployment rates that could look similar, if not a little worse, than 2009. Michael said he does not expect next year's unemployment low to be any lower than this year's 15.2 percent, achieved in September.

"I don't think we'll see any sustained improvement in market," he said. "But the trend will be different. We will be coming off of the peak. But the overall unemployment rate will probably be higher in most of 2010 than 2009. We'll find our highest level and then start to decline."

Still, the Central Valley and foothills do not have the bleakest unemployment picture in the state. Imperial County in Southern California had the highest unemployment rate in the state at 29.2 percent for November. Marin County's, on the other hand, was the lowest, at 8 percent.

The Associated Press contributed to this report.

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

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