Jobless Rate in California Climbs to 9.4%

California, still trapped in a severe economic slump despite modest employment growth nationally, lost 18,200 jobs in September and saw its unemployment rate climb to 9.4% from 9% in August, the federal government reported Friday.

Analysts blamed the state’s new job losses on the persistent weakness in the defense and construction businesses, along with the ripple effects of those declines in retailing and other parts of the economy.

“We don’t see signs of life anyplace� among the state’s major industries, said Larry Kimbell, director of the UCLA Business Forecasting Project.

The figures for Los Angeles County were even worse, with the jobless rate jumping to 9.7% in September from 8.8% in August. The county’s jobless rate, always volatile because of the small survey it is based on, is now the highest it has been since March, when it reached 10.4%.

Nationally, the jobless level held steady at 6.7% as further losses in manufacturing were more than offset by gains in local government, retailing and other services. Yet many economists regarded the national picture as discouraging as well, even though there were few, if any, surprises in the numbers.

September’s U.S. figures “weren’t quite as good as it looks on the surface,� said Cynthia Latta, an economist with the consulting firm DRI/McGraw-Hill in Lexington, Mass.

“What you’re doing is trading manufacturing jobs, which pay well, for lower-paying service jobs,� particularly in retailing, Latta explained.

Overall, she said, “it doesn’t change the picture of an economy that is just muddling along.�

The mediocre national economic news further calmed investors’ concerns about inflation, triggering a bond market rally that sent the price of 30-year bonds up 1 1/4 points and reduced long-term interest rates nearly one-tenth of a percentage point.

In fact, with heavy bond trading beginning two minutes before the 8:30 a.m EDT release of the employment statistics, the Labor Department and the Chicago Board of Trade announced they would investigate whether the figures were leaked early.

The nationwide job gain, according to the government’s closely watched survey of employers, totaled 156,000. Although that marked a turnaround from a loss of 41,000 positions in August, the pace of job creation continues to lag far behind that during other economic recoveries.

Speaking in New York, Labor Secretary Robert B. Reich said that the U.S. economy is “not out of the woods by any means.�

While calling September’s increase in jobs “good news,� Reich said he is concerned about the stubbornly high unemployment rate and the time it takes unemployed workers to find new jobs.

“At this point in a recovery, the percentage of long-term unemployment usually drops. But at this point, long-term unemployment is increasing,� Reich said.

More than one in five of the 8.5 million unemployed Americans have been out of work for 27 weeks or longer.

President Clinton, in an address before the Democratic National Committee, conceded that the economic recovery is “slower than we thought it would be.� But he noted that the private sector has added jobs at the rate of 152,000 people a month this year--the fastest pace in more than four years.

Still, analysts saw no evidence suggesting a pickup in economic growth or job creation in coming months. During September, hourly earnings were flat and the average number of hours worked dipped slightly.

Moreover, a 54,000 increase in local government jobs probably was inflated by statistical flukes in the way teaching positions and summer employment were counted, analysts said.

And with a loss of 18,000 manufacturing jobs in September, employment in that area of the economy is down by more than 800,000 since the national economic recovery began in early 1991.

“It’s a stagnant picture, and I think it’s going to stay that way,� said Audrey Freedman, a labor economist in New York.

Freedman noted that the number of people in the labor force--those working or looking for jobs--fell by 395,000 in September, which she attributed to “discouragement in general� about the economy.

“People stay home and don’t look for work when they don’t see the possibility of finding the job, or when it looks difficult to find a job,� she said.

California’s jobless rate this year has ranged from a low of 8.6% in April to high of 9.8% in February and July. Its 9.4% rate in September gave the state the highest unemployment rate among the 11 big states whose figures were released. Next came Illinois, at 8.5%. The state with the lowest rate was North Carolina, at 4.2%.

In Los Angeles County in September, the number of unemployed climbed by 38,000, to 433,000, while the number of employed fell 41,000, to 4.06 million.

The results were particularly discouraging because the county’s jobless rate--which, unlike the federal and state figures, is not adjusted for seasonal trends--in recent years usually has improved in September, said Jay D. Horowitz, labor market analyst with the California Employment Development Department.

He also noted recent figures showing manufacturing employment down nearly 56,000 over the past year.

Jobless Rates

Here are U.S. and California unemployment rates, in percentages, over the last year:

U.S. Calif. Sept. 6.7 9.4 Aug. 6.7 9.0 July 6.8 9.8 June 7.0 9.1 May 6.9 8.7 April 7.0 8.6 March 7.0 9.4 Feb. 7.0 9.8 Jan. 7.1 9.5 Dec. ’92 7.2 9.8 Nov. 7.2 10.1 Oct. 7.3 9.8 Sept. 7.4 9.4