ECONOMY: Jobs picture worsens, unemployment hits 9.2 percent

Region among worst in the nation for job losses

By ZACH FOX - Staff Writer | Friday, September 19, 2008 8:12 PM PDT ∞

Riverside County's recession worsened last month as the unemployment rate spiked to 9.7 percent, according to a data release Friday.

For the 14th straight month, the metro region of Riverside and San Bernardino counties lost jobs. Employers shed 25,000 jobs from the same month a year ago, the state's Employment Development Department reported.

"If you're unemployed, it's terrible. That's a bad labor market," said Dan Seiver, a finance professor at San Diego State University. "Smaller labor markets can deteriorate a lot faster than a statewide or national market."

Riverside and San Bernardino's unemployment rate is among the worst for metro areas in the state at 9.2 percent, significantly higher than the statewide rate of 7.6 percent and the national average of 6.1 percent. A year ago, the region's unemployment rate sat at 6.4 percent.

It is the worst employment environment in more than 15 years as a severe housing recession has ravaged construction jobs and brought about malaise throughout the economy ---- translating into large losses of manufacturing and retail jobs.

However, Phil Blair, co-owner of Manpower's Temecula branch, said Southwest Riverside County's labor market is not seeing the same amount of weakness that the rest of the county is. Unemployment rates at city levels are not available on a month-to-month basis.

"I think Temecula statistics, in most areas, relate more to North San Diego County than they do to North Riverside County," Blair said. "It's a more sophisticated market; it's a more sophisticated populace."

If Southwest County employment trends do indeed track those in San Diego County, its weakness may just be beginning. While Riverside-San Bernardino has seen employment declines for the last year, San Diego County has only recently experienced job losses in five of the last six months.

In the Inland Empire, few sectors posted job gains, with educational and health services leading the way by adding 3,300 jobs. A multibillion dollar deficit in Sacramento has virtually eliminated the gains in government employees ---- governments slashed 7,400 employees from July to August.

A severe real estate recession, with home prices down as much as 40 percent in some Southwest County areas and foreclosure rates exceeding home sales, has led job losses. The construction sector shed 15,800 employees from the same month a year ago while manufacturing eliminated 6,900 jobs. Consumers have cut back on buying nonessential products, leading to a decline of 4,500 retail jobs.

Riverside County's tough job market has changed the dynamics of job placement agencies. For example, Manpower's Temecula office is no longer running advertisements because of a glut of applicants, Blair said.

And at Job Specs, a San Marcos firm, counselors have seen 40 to 50 candidates apply for each posted opening when they used to see six to eight.

"We talk to a lot of people who are very discouraged," said Sandra Quintania, a regional recruiting manager for Job Specs. "We tell them it's just the economy. You can't give up. You just have to keep trying."

But based on the activity seen at Manpower, Blair said a recovery is in the future.

"I think the worst is over. We're in a trough," said Blair, whose company often surveys companies on their hiring plans. "From talking to our customers, we don't see huge layoffs coming up."

However, other economists are much more pessimistic about the immediate future of the local employment market.

For one, Manpower's survey shows that Southwest Riverside County employers will not be adding jobs soon, with 10 percent of employers expecting to add staff in the fourth quarter while 20 percent plan to lay off employees.

Also, economists have noted that consumer spending, one of the major drivers of the local economy, declined recently and is expected to remain weak, driving down retail jobs.

"People looking for jobs right now are going to have a tough time of it," said Seiver. "There's no way to put lipstick on that pig."

Contact staff writer Zach Fox at (951) 676-4315, Ext. 5412, or zfox@californian.com. Read his blog, "On the Realside," at nctimes.com/blogs/minding_your_business