County Jobless Rate Drops to 29-Month Low : Unemployment: Gains in the service and construction industries are credited with the dip to 5.3% in May. Some economists say it’s a sign the local recovery is underway.

ANAHEIM â€”  An improving economy helped push the Orange County unemployment rate to a 29-month low of 5.3% in May, the state Employment Development Department reported Friday.

Job gains in the service industry and construction hiring are credited with the lower rate, down from 6.2% in April, which suggests the county might finally be on the road to recovery from a recession that began in 1990.

One good month isn’t enough, however, to overcome more than three years of bad times: A separate report by EDD labor market analyst Eleanor Jordan shows that while there were 4,200 more jobs in May than in April, the county figure remained well below the year-earlier level.

Though the statistics are still too fluid to establish a trend, Jordan said most of the new jobs in May were permanent rather than summer hires. And the falling jobless rate was consistent across the state. California’s May unemployment rate of 8.1% was down a full point from 9.1% in April and the jobless rate nationwide dropped to 5.9% from 6.2%.

That’s good news, said a clearly optimistic Anil Puri, head of the economics department at Cal State Fullerton. “There is no question that a recovery is finally underway.�

Westminster tax consultant Judee Slack said she sees clear signs of recovery as her mostly small-business clients come in for advice.

“The business is out there and the work is out there,� Slack said. “Some of my clients are doing some hiring. But we’re also seeing many small businesses still caught in a credit crunch. They do work and get paid 60 to 90 days later, so they can’t hire because their employees need to get paid every week.�

Puri, who has predicted that 1994 would be a year of employment growth, said Orange County employers will begin adding jobs more rapidly in the second half of the year as optimism and economic conditions improve.

Chapman University economists in December predicted almost imperceptible job growth in 1994, but they also are revising their data.

In the midyear update of its annual economic forecast next week, the university’s Center for Economic Research will also call for a modest recovery. But the figures will remain more pessimistic than Cal State Fullerton’s, said Chapman economic research director Esmael Adibi.

“We don’t think it will be that much,� he said Friday, referring to Fullerton’s October projection that Orange County will end the year with a net increase of 15,000 to 20,000 jobs.

EDD analyst Jordan’s monthly employment report now shows four consecutive months of job increases.

Her tally, based on reports filed by employers, shows there were 1,117,900 full- and part-time jobs in the county in May, down 5,000 from a year earlier but an increase of 1.5% from 1,101,300 jobs in January.

Puri said he doesn’t think that kind of growth will continue unabated. Permanent hiring typically slows in the summer as employers turn to temporary, seasonal workers, and the employment count at the end of the summer dips considerably.

But the economist said he is sticking with his October prediction of up to 20,000 new jobs in the county by year’s end.

In either case, that would make 1994 the county’s first growth year since 1990.

Job increases in May occurred largely in construction, up 1,800 positions from April, and the broadly defined service sector, which added 1,300 employees in businesses ranging from doctors’ and lawyers’ offices to catering and shoe repair shops.

Jordan said that amusement parks and other summer employment hot spots didn’t increase hiring in May, which could point toward another big employment jump for June when they do add staff for the peak tourist season.

Jobless Rate Drops

Orange County’s unemployment rate reached its lowest point in 29 months in May. The county’s jobless rate:

‘94: 5.3% Source: Employment Development Department