October 20, 2007

O.C. job growth grinds to a halt in September
Non-farm employment rose by just 300 jobs in 12 months through September.
By ANDREW GALVIN
The Orange County Register

Job growth in Orange County has officially flatlined.

Data released Friday by the state Employment Development Department showed that non-farm employment in Orange County increased by just 300 jobs, or 0.02 percent, in the 12 months through September.

The news came one day after more reliable federal data showed the county's annual rate of job growth was 0.1 percent in the first quarter, or well below the state's previously released estimate of 1.1 percent growth for that period.

"I think we are headed toward recession," said Esmael Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University in Orange.

The Anderson Center defines a local recession as two consecutive quarters of negative job growth.

While non-farm job growth in Orange County hasn't turned negative yet, Adibi thinks it's headed that way.

The federal numbers, although not as timely, are considered more accurate than the monthly state estimates because they are based on employers' actual unemployment insurance filings. The state data is based on a survey of a smaller group of employers.

The state numbers have tended to underestimate job growth in Orange County in recent years. So the suggestion that the state might have over-estimated growth in the first quarter came as a surprise. The state revises its numbers annually after comparing them with federal data in a process called benchmarking.

Adibi still thinks that the latest state figures reflect more weakness than actually exists. However, they do show that weakness has spread from the housing-related financial and construction sectors to other areas of the local economy, he said.

For example, professional and business services, once a bulwark of growth in Orange County, is showing a decline of 0.4 percent in jobs over the past 12 months. Transportation and warehousing, an indicator of the wholesale industry, is down 5.2 percent.

Financial activities are down 2.5 percent. Construction is down 3.1 percent.

The bright spots in Friday's report are government, which grew by 4,900 jobs, or 3.2 percent, over the past year, and education and health services, which grew by 2,400 jobs, or 1.7 percent.

The last time Orange County had negative year-over-year job growth was in the 12 months ended September 2002, when the growth rate was -0.2 percent.

Anil Puri, dean of the College of Business and Economics at Cal State Fullerton, said he will discuss the possibility that Orange County is headed for a recession when he presents his 2008 economic forecast at the Hyatt Regency in Irvine on Monday.