August unemployment rate rises to 5.2 percent By Grace Lee ASSOCIATED PRESS --------------------------------------------------------------------------------

SACRAMENTO -- Lost manufacturing jobs drove California's August jobless rate up to 5.2 percent, showing the state's participation in a yearlong national slowdown that has cost more than 1 million manufacturing jobs.

August's figure was a .2 percent jump from August 2000, according to statistics released Friday by the state Employment Development Department. The jobless rate for July was 5 percent.

Manufacturers slashed 8,700 jobs, hitting workers in the electronic equipment and apparel sectors the hardest.

Technology-heavy Santa Clara County lost total 7,000 jobs from July to August, as its unemployment rate jumped to 5.4 percent from 4.9 percent in July. The latest numbers continue a trend in rising unemployment for Silicon Valley, said Ruth Kavanagh, spokeswoman for the Santa Clara County Employee Development Department.

The county's high-tech sector shrunk by 2,400 jobs and the services sector -- nearly half of which comprises business services such as software development and temporary employment agencies -- lost 2,800 jobs, Kavanagh said. The county's remaining 1,800 lost jobs came from a variety of other sectors.

These numbers must be viewed in perspective, Kavanagh said, because Santa Clara had grown faster than any other county in California in 2000. "The job loss is a small part of the jobs gained in 2000."

Friday's unemployment figures also don't include any jobs to be cut after the announcement by San Jose-based Hewlett Packard last week that it will buy rival Compaq Computer Corp. The news, on the heels of 8,500 jobs already cut at Hewlett Packard, sparked speculation about even higher unemployment in technology manufacturing.

But Ted Gibson, senior economist for the California Department of Finance, said the merger would have little impact on the overall California economy because Hewlett Packard contracts out its computer manufacturing to companies outside California.

While California has a higher unemployment rate at 5.2 percent than the nation's 4.9 percent, Gibson said, "year after year, the state has still outperformed the nation."

Even though "we're slowing down, we're still faster than the rest of the country," Gibson said, adding that the rest of the nation lost manufacturing jobs at a higher rate than California.

The jobless figures don't reflect the effects of Tuesday's terrorist attacks on New York and Washington, which shut down air transportation and which some analysts said could trigger a recession.

"Clearly the market was already weakening," said Lori Kletzer, a University of California, Santa Cruz, economist. "The new uncertainty about the future could have an impact on consumer spending" and further weaken the California and national economies.

The nation's unemployment rate swelled to 4.9 percent in August as job losses in manufacturing passed 1 million. The 0.4 percent jump was the largest increase in the monthly jobless rate in six years and sent stocks tumbling on Wall Street.

Despite the overall numbers, Art Jensen, professor of marketing at California State University, Sacramento, said people had been "expecting more (job losses) than this and it hasn't really occurred yet."

The finance and government sectors continued to see more jobs than expected between July and August. The higher number of government jobs are mostly because of the new teachers hired for summer classes and the steady growth of year-round schools, said Suzanne Schroeder, a spokeswoman for the Employment Development Department.

Los Angeles County saw the jobless rate drop 0.1 percent to 5.6 percent. The construction sector saw the largest gains.

Orange County also saw the unemployment rate dip to 3.1 percent, down from a revised 3.2 percent in July.

The number of people unemployed in California was 907,000. Of the unemployed, 454,900 were laid off and 132,800 left their jobs voluntarily.

http://www.contracostatimes.com/news/bayarea/stories_baybreak/jobless_20010914.htm

-- Martin Thompson (mthom1927@aol.com), September 14, 2001