Jobless rate up in state, county
Figures reflect slowing in real estate market
By Dean Calbreath
UNION-TRIBUNE STAFF WRITER
November 19, 2005
The unemployment rate edged higher in San Diego County and statewide last month, as the pace of job growth slowed, dragged down by a cooling in the housing market.
In California, employers added 6,800 jobs to their payrolls in October, after seasonal adjustments to the data. That was less than half the monthly job growth over the past year.
In San Diego County, payrolls rose by 6,200 jobs. But that figure – which was not seasonally adjusted – was boosted by more than 6,000 education-related jobs as teachers and school staff members returned to work.
The unemployment rate inched up from 4.2 percent to 4.4 percent in the county, while California's jobless rate rose from 5.1 percent to 5.2 percent. Nationwide, unemployment slipped from 5.1 to 5.0 percent.
Economists blame the sluggishness in the job market partly on the slowdown in the real estate market.
"Over the past couple years, employment has been completely driven by real estate," said Christopher Thornberg, senior economist at the Anderson Forecast of the University of California Los Angeles. "But now the real estate market is cooling off, and the state isn't adding many jobs anywhere else."
Statewide, the strongest employment sector last month was leisure and hospitality, which added 8,600 jobs. Manufacturing also showed some signs of life after a long decline, adding 2,400 jobs.
But the gains in tourism-related jobs and factory work were offset by the loss of 2,700 information technology jobs and 4,200 business and professional positions.
Financial firms, such as real estate and mortgage brokerages, which have been a prime driver of employment growth during the recent housing boom, lost 200 jobs. Employment in residential construction dropped by 1,300 jobs statewide and 200 jobs in San Diego.
Real estate experts note that fall is typically a slow season for home construction and that dips in employment are common.
"It's always hazardous to judge construction work by a single month or two, since construction tends to be more volatile than a lot of other economic figures," said Ken Simonson, chief economist for the Associated General Contractors of America, the nation's leading construction trade association. "For the year to date, construction employment in California and San Diego are still well ahead of last year."
On the other hand, housing sales data show that the market is cooling.
Over the past 12 months, 56,324 homes were sold in San Diego County, according to Dataquick, a La Jolla real estate information service. That's a 9 percent drop from the previous year, when 61,886 homes were sold.
"The market has definitely cooled off, and it's getting worse," said Robert Feher, who heads All Mission Properties in Carlsbad. "Homes are languishing on the market much longer than we've seen in a number of years, and that's definitely had an influence on the job market for real estate agents."
Building permits for housing in the first nine months of the year are 2 percent lower than last year. Although there has been a sharp rise of multifamily units this year, it has been offset by an even steeper decline of single-family homes, which could hint at further weakness in construction employment.
"It takes more construction workers to build 100 single-family homes than to build a single 100-unit apartment complex," said Alan Gin, economist at the University of San Diego.
Gin said the slowdown is troubling, since the boom in construction, real estate and mortgage financing was responsible for most of the high-paying jobs that were created in the past couple years.
"The worry is that if housing employment slows, a lot of the job growth is going to be in low-paying areas, such as leisure and retail," he said. "There doesn't seem to be a lot of high-paying jobs on the horizon."
signonsandiego.com
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Dean Calbreath: (619) 293-1891; dean.calbreath@uniontrib.com
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