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California jobless rate soars to 8.2%

California's unemployment isn't just getting worse. It's getting worse faster.

With the economic slowdown deepening at an alarming pace, statewide unemployment shot up a half a point last month to 8.2 percent, the Employment Development Department said Friday.

That means unemployment has jumped 2.5 points since October 2007, the biggest one-year leap since the recession of 1982, said Howard Roth, the state's chief economist. That year, unemployment rose to 11 percent.

Already the state unemployment rate is the highest since 1994. October's job loss was 26,400, and the job cuts went well beyond the usual suspects of construction and finance.

"Pretty sobering," Roth said. "This thing looks to be spreading."

California unemployment is the third highest in the nation, after Michigan and Rhode Island (9.3 percent each).

In Sacramento, unemployment went up a half-point, to 7.9 percent, the highest since 1994. The Sacramento region actually added 1,000 jobs during the month, with education providing a big boost. But far more people flooded into the Sacramento job market (8,300) than could actually find work. So the unemployment rate climbed.

This was another sign of economic weakness. It's likely that many of the new job-seekers were looking for seasonal work in retailing, said EDD labor market consultant Diane Patterson. Many were frustrated; retailers added only 200 jobs, less than half than usual for October.

"You're not seeing the usual Christmas hires," Patterson said.

Jeff Michael, the director of business forecasting at the University of the Pacific, said the November retail hiring numbers will be crucial to getting a sense of how bad the economy is doing.

"That's the one to watch, is whether we get the boost we're normally accustomed to," he said. "I have a hunch it's not going to be what we're used to."

The retail scene will take another hit just before Christmas. Discount chain Mervyns, which is going out of business, has set a Dec. 23 date for ending thousands of California jobs, including more than 700 in greater Sacramento, according to documents filed with the state.

Other industries are being affected. AAA in December will cut 70 workers as part a gradual shutdown of its Elk Grove call center. Hewlett-Packard Co. is eliminating 71 jobs in Roseville by Dec. 5, according to state layoff filings. Johnson Controls, a maker of building-efficiency systems, is trimming 36 employees in Folsom on Dec. 7, according to the filings.

Irene Ellis of Carmichael was cut loose a week ago as an escrow officer at Placer Title Co. her first pink slip in 37 years in the escrow business.

"There's been a lot of consolidating, a lot of companies closing," she said. Still, she's hopeful: "Absolutely, there are opportunities."

But Jennifer Howell and Lisa Maloney are struggling to remain optimistic. The roommates from Fairfield, who left the U.S. Coast Guard this summer, visited a job fair for veterans this week at Arco Arena.

"We're desperate," said Maloney, who's falling behind on her mortgage payments. "This is the first time in 12 years I haven't had a job. I never had a problem getting a job."

This time, though, things are different. An opening at the Internal Revenue Service disappeared because funding fell through, Maloney said.

Roth said the state was losing about 5,000 jobs a month in the first five months of 2008. For the past five months, the average is nearly 16,000.

Some of the worst pain is striking some of the poorest parts of the state. In much of the troubled Central Valley, unemployment is back over 10 percent erasing the job growth from the housing boom. In Yuba City-Marysville, unemployment has jumped four points in a year, to 12.5 percent.

On Friday, Gov. Arnold Schwarzenegger repeated his call for a stimulus package that includes accelerated public-works spending. He announced $15 million in job-training grants, including $546,000 for Sacramento.

He urged the Legislature again to fix the state's Unemployment Insurance Fund, which is facing an estimated $2.4 billion deficit next year. Schwarzenegger has proposed borrowing from the federal government, raising unemployment taxes on employers and cutting benefits.

On Friday, President George W. Bush signed a bill extending unemployment benefits for up to three months for those whose benefits have expired or are about to.

The October jobless report showed the construction industry where the recession began remains deeply troubled. In Sacramento, 1,600 jobs disappeared, more than twice as many as usual for October, Patterson said.

Roth said seven of the 11 major economic sectors reported job losses. Retailing lost 9,000 jobs statewide, more than one-third of the state total.

The cuts "are not just housing-related anymore," Roth said.

There are some bright spots in the Sacramento region's economy. The Red Hawk Casino in Shingle Springs, which opens Dec. 17, is hiring 1,800 workers. The health care industry has added 3,000 jobs in the past year. Professional and business services gained 900 jobs.

But even among the white-collar professions, signs of wear are apparent. ConnectPoint Search Group, a Sacramento placement firm that focuses on the accounting industry, has seen business jump lately. But "we're seeing larger layoffs," said firm President Curt Cetraro. "We're seeing (firms) taking longer to make hiring decisions."

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              Page Updated: Thursday May 07, 2009 09:14 AM  Pacific

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