e-EDGE is now available as an RSS feed. [Click here to subscribe to it.]The May report from the California Employment Development Department was unpleasant. The state’s unemployment rate jumped up to 6.8%, while total nonfarm employment declined from April to May by -10,900 jobs. This was the third month in a row of month-to-month job losses. Over the year, seasonally adjusted nonfarm employment declined by -0.1% or-18,600 jobs.
Looking at the unadjusted detail, the largest declines over the year to May came in: construction (-90,100 jobs); finance & insurance (-31,400 jobs); and manufacturing (-21,900 jobs). Losses in the latter reflected weakness in sectors related to construction and housing. The largest employment gains over the year to May came in: government (+43,100 jobs); health services (+41.400 jobs); and professional, scientific & technical services (+24,900 jobs).
Around Southern California, the news wasn’t much better. Total nonfarm employment in Los Angeles County was down by -0.2% over the year or -6,800 jobs. The biggest losses were in: construction (-10,700 jobs); information (-7,000 jobs); and finance & insurance (-6,900 jobs). The largest gains over the year to May came in: health services (+9,300 jobs); government (+8,600 jobs); and leisure & hospitality services (+4,300 jobs).
Note: the County’s job picture is being destabilized by the June 30th expiration of the Screen Actor’s Guild contract. While employment in motion picture & sound recording was up by 2,100 jobs from April to May, it was down over the year by
- 5,700 jobs. (Motion picture production is in the “information” sector.) The major studios have been hesitant to start work on a film. Many in the industry are saying that a de facto strike is underway.
Orange County saw nonfarm employment in May decline by -1.4% or -21,000 jobs. The biggest losses over the year came in: finance & insurance (-14,300 jobs); construction (-4,900 jobs); and manufacturing (-4,200 jobs). The largest increases came in government (+2,700 jobs) and health services (+2,200 jobs). The County’s usually reliable leisure & hospitality sector has been inching down the last few months (-700 jobs over the year to May).
The Riverside-San Bernardino area saw May employment drop by -1.8% over the year or by -22,600 jobs. The largest declines came in: construction (-15,700 jobs); manufacturing (-6,500 jobs); and retailing (-4,000 jobs). The largest gains in May were found in government (+5,200 jobs) and health services (+3,100 jobs).
San Diego County, which had been holding up, fell off its chair in May, with a decline of -0.2% or -3,200 jobs over the year. The biggest losses over the year were in: construction (-8,900 jobs) and finance & insurance (-3,000 jobs). The largest gains came in leisure & hospitality services (+4,500 jobs) and professional, scientific & technical services (+3,200 jobs). The County’s manufacturing sector was about flat (-100 jobs over the year), due to strength in the durable goods sector.
Ventura County saw May employment slide by -2.0% over the year, or by -6,100 jobs. The biggest losses were in construction (-2,300 jobs) and manufacturing (-2,100 jobs). The only gains of note came in health services (+500 jobs) and education (+400 jobs).
The May jobs news from the Bay area was mixed. The Oakland area saw nonfarm employment slide by -1.2% or by -12,100 jobs. The San Francisco area continued to record growth, with an increase in May of +1.8% or +17,900 jobs. The San Jose area also added jobs during May, up by +0.7% or +6,700 jobs. The latter, however, was the smallest over the year gain so far in 2008.
The May jobs reports has revived the debate over whether the state has fallen into a recession. Clearly, some areas are hurting, but others (like the Bay Area) seem to be holding up. (Jack Kyser)
California data: http://www.calmis.cahwnet.gov/file/lfmonth/cal$PDS.pdf
LA County data: http://www.calmis.cahwnet.gov/file/lfmonth/la$PDS.pdf
Orange County data: http://www.calmis.cahwnet.gov/file/lfmonth/oran$PDS.pdf
Riverside-San Bernardino data: http://www.calmis.cahwnet.gov/file/lfmonth/rive$PDS.pdf
Ventura County data: http://www.calmis.cahwnet.gov/file/lfmonth/vent$PDS.pdf
Oakland data: http://www.calmis.ca.gov/file/lfmonth/oak$pds.pdf
San Francisco data: http://www.calmis.ca.gov/file/lfmonth/sanf$pds.pdf
San Jose data: http://www.calmis.ca.gov/file/lfmonth/sjos$pds.pdf
The California Employment Development Department (EDD) released unemployment figures for May last Friday. Los Angeles County’s seasonally adjusted unemployment rate rose to 6.7% up from 5.9% in April, and up from 4.9% twelve months earlier. May was the twelfth consecutive month the County’s unemployment rate increased over the previous year and was the highest rate since June 2004 (also 6.7%).
California’s seasonally adjusted unemployment rate rose to 6.8% in May, up from 6.2% in both April and March, and up from 5.3% from a year earlier. The state unemployment rate was the highest since November 2003 (7.1%). The U.S. unemployment rate was 5.5% in May, up from 5.0% in April and 5.1% in March, and up from 4.5% in April 2007.
The not seasonally adjusted five-county Los Angeles area unemployment rate rose by +1.8 percentage points in May (to 6.3%) from a year earlier. Joblessness increased by +2.3 percentage points in Riverside County (to 7.6%), by +2.1 percentage points in San Bernardino County (to 7.2%), by +1.9 percentage points in Los Angeles County (to 6.4%), and by +1.3 percentage points in both Orange and Ventura counties (to 4.8% and 5.6% respectively).
San Diego County’s unadjusted unemployment rate increased to 5.5% in May, and up by +1.4 percentage points from 12 months earlier.
The Bay Area’s combined unemployment rate in May (also not seasonally adjusted) increased by +1.2 percentage points to 5.4%. Joblessness increased by +1.4 percentage points in both the Oakland-Fremont-Hayward Metropolitan Division (to 5.7%) and the San Francisco-San Mateo-Redwood City Metropolitan Division (to 4.6%) , and by +1.2 percentage points in the San Jose-Sunnyvale-Santa Clara Metropolitan Statistical Area (to 5.6%). (Eduardo J. Martinez)
Not Seasonally Adjusted
| Area | May-08 | April-08 | March-08 | May-07 | MM | YY |
| United States | 5.2 | 4.8 | 5.2 | 4.3 | 0.4 | 0.9 |
| California | 6.5 | 6.1 | 6.5 | 4.9 | 0.4 | 1.6 |
| Los Angeles Co. | 6.4 | 5.7 | 5.8 | 4.5 | 0.7 | 1.9 |
| Orange Co. | 4.8 | 4.4 | 4.6 | 3.5 | 0.4 | 1.3 |
| Riverside-San Bernardino Cos. | 7.4 | 6.9 | 7.2 | 5.2 | 0.5 | 2.2 |
| Ventura Co. | 5.6 | 5.2 | 5.6 | 4.3 | 0.4 | 1.3 |
| San Diego Co. | 5.5 | 5.1 | 5.3 | 4.1 | 0.4 | 1.4 |
| Oakland MD | 5.7 | 5.3 | 5.5 | 4.3 | 0.4 | 1.4 |
| San Francisco MD | 4.6 | 4.2 | 4.4 | 3.7 | 0.4 | 0.9 |
| San Jose MSA | 5.6 | 5.2 | 5.5 | 4.4 | 0.4 | 1.2 |
Seasonally Adjusted
| Area | May-08 | April-08 | March-08 | May-07 | MM | YY |
| United States | 5.5 | 5.0 | 5.1 | 4.5 | 0.5 | 1.0 |
| California | 6.8 | 6.2 | 6.2 | 5.3 | 0.6 | 1.5 |
| Los Angeles Co. | 6.7 | 5.9 | 5.8 | 4.9 | 0.8 | 1.8 |
PR: http://www.edd.ca.gov/urate200710.pdf
Data: http://www.calmis.cahwnet.gov/file/lfmonth/CalPR.pdf
There was little change in trend at the states’ three major ports during May. At the Los Angeles/Long Beach Complex, the total number of containers handled during the month was down by -5.6% to 1.21 million TEUs. The number of import containers moved was down by -5.9% to 638,408 TEUs, though Los Angeles managed a 2.6% gain over the year. Export activity remained brisk, with an increase of 22.1% to 322,860 TEUs.
May container activity at the Port of Oakland fell by -9.3% to 183,800 TEUs. Import volume declined by -5.5% over the year, while export activity managed only a 2.9% gain. (Jack Kyser)
Port of Long Beach PR: http://www.polb.com/economics/stats/latest_teus.asp
Port of Los Angeles PR: http://portoflosangeles.org/maritime/stats.asp
The U.S. Census Bureau reported last week that U.S. housing starts fell by -3.3% in May to just 975,000 units (seasonally adjusted annual rate or SAAR), a new low though still in the one million-plus-or-minus pace visible since December 2007. Construction was started on 674,000 single-family homes in May, down by -1.0% from April—and the lowest level for single-family starts since January 1991. In the volatile multi-family sector (apartments and condominiums), some 301,000 units were started last month (-8.0%), partially reversing last month’s big increase (+18.1%).
Total housing starts peaked back in January, 2006 at 2.27 million units, according to the Census Bureau. Starts reached a new low for this downturn in May and were down by -54% from the peak quarter (2006q1). Single-family starts were down by an astonishing -62%, while multi-family starts were “only” -20% below the peak. Not a pretty picture!
The underlying fundamentals in the housing industry continue to be negative. The latest monthly survey of homebuilder attitudes taken by the NAHB (National Association of Home Builders) returned to the record low level set in November (data go back to 1985). About five-sixths of the builders reported slow sales, and the same fraction complained about low buyer traffic. Expectations for future sales fell continue to be dismal.
Most builders and industry observers expect housing construction activity to move down some more from here. They disagree though on how much farther starts will fall and how long it will take until the bottom is reached. The “optimists” expect the trough will be reached sometime this year, while the “pessimists” forecast declining starts through 2008 with the bottom not coming until 2009. (Nancy D. Sidhu)
PR: http://www.census.gov/const/newresconst.pdf
Wholesale prices for finished goods, as measured by the Producer Price Index (PPI), rose sharply – by +1.4% – in May (month-over-month, SA), following a modest +0.2% increase the month before. Compared with May 2007, the PPI has risen by +7.2%, the largest such increase since January 2008. The finished consumer food price index rose by +0.8% from the previous month and was +6.5% higher than a year ago. The finished energy index posted strong gains, rising by +4.9% in May, following a decline of -0.2% in April, and was +19.7% higher than twelve months ago. Excluding food and energy, the core finished goods index was up by a modest 0.2% in May and was up by 3.0% from May 2007.
Within the finished food group, high month-over-month increases were recorded in the wholesale prices of milled rice (+15.3%) and pork (+8.0%). Milled rice wholesale prices have soared by +83.2% from twelve months ago. Pork prices have increased due to the continued rise in feed costs. On the other hand, there were notable declines in the wholesale prices of both fresh/dry vegetables (-9.0%) and fresh eggs (-4.1%).
Wholesale finished residential energy prices advanced in May. Persistent increases in home heating oil and residential gas prices were both recorded, rising by + 8.0% and +3.8% respectively (month-over month). Wholesale gasoline prices shot up by more than +9.3% over the month, following a -4.6% decline the previous month, and were up by +26.3% from a year ago.
The increase in wholesale prices for intermediate goods was sizable as well, rising by +2.9% in May (month-over-month). Compared to a year ago, the overall intermediate goods index rose by double-digits, by +12.6%. Farmers’ costs continued to stay high, with prices of feeds, diesel, fertilizers, agricultural machinery, and other energy-related goods up considerably over the year. Diesel prices shot up over the month, by +11.2%, and were +75.8% higher than in May 2007. Jet fuel rose by +6.9% in May, and was up by +72.0% over the year. No wonder airfares are increasing! Excluding food and energy prices, the core index for intermediate goods rose by +2.0% over the month. The core intermediate goods index has risen by +7.4% over the past 12-months.
Wholesale prices for crude goods (goods ready for further processing) rose by +6.7% in May (month-over-month), following a +3.2% increase in April. Compared to a year ago, the overall crude goods index was up by +41.5%. Within the crude group, slaughtered hog prices rose by a significant +18.1% in May. Wheat prices, the most watched item (at least this year), declined two months in a row, and were down by -7.5% in May. However, over the year, wheat prices were still up by +79.4%. Corn and soybeans wholesale prices were also significantly elevated year-over-year, rising by +59.3% and +81.1%, respectively. Both are used for production of ethanol/biofuels. Unfortunately, you should expect another significant jump in corn prices, due to flooding in the corn-producing states. Total crude energy prices rose by +13.1% over the month, and were up by +67.0%. Excluding food and energy prices, the core index for crude goods was up by +5.0% in May. The core crude goods index has risen by +41.5%% over the past twelve months. (Candice Flor Hynek)
PR: http://www.bls.gov/news.release/pdf/ppi.pdf
Wednesday, July 16: 2008 Mid-year Economic Forecast - Early Bird Rate ends Friday!
In addition to the Mid-year Economic Forecast updates, the LAEDC and its subsidiary, the World Trade Center Association Los Angeles - Long Beach, will also unveil the final report of the LAEDC's Foreign Direct Investment Study, highlighting the economic impact to the regional economy. 2 panels of experts to include: James Dibbo, BT Americas; John Burns, John Burns Real Estate Consulting; Richard A. Weiss, City National Bank; Vance Baugham, WTCA LA-LB; and Jack Kyser, LAEDC.
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