County jobless rate hits 2-year high

Unemployment in Sonoma County climbed to 4.6 percent in July -- its highest rate in two years -- as the local economy felt a loss of jobs in the real estate and home loan industries.

The unemployment rate also reflected a seasonal loss of public sector jobs, with many non-tenured teachers counted among the jobless.

The jobless figure was 4.3 percent in June and 4.4 percent in July 2006.

"We may be seeing some early signs of layoffs in the financial area," said Ben Stone, who heads the Sonoma County Economic Development Board.

At the end of July, National City Mortgage laid off 40 workers at its Santa Rosa call center. Another 60 company employees will lose their jobs by September. The layoffs followed earlier cuts at National City and other Sonoma County mortgage centers.

The housing sector slowdown led to a loss of 450 financial services and construction jobs in Sonoma County in the first half of 2007, according to Moody's Economy.com, which tracks local employment.

July's data showed no change in the number of real estate and finance jobs since June, but a loss of 300 in business and professional services, another category that reflects home sales and lending, including mortgage call centers.

The drop in home sales activity could eventually affect sectors such as retail, which may see fewer sales of furniture, appliances and other big-ticket items, Stone said.

Even with the bump in unemployment, Sonoma County had 3,900 more people working last month than a year ago, driven by gains in commercial construction, retail, manufacturing and business support services.

Sonoma County bucked a statewide trend, gaining 300 construction jobs since June, said Tiffany Furrell, labor market consultant for the state Employment Development Department. Statewide, the construction sector dropped 7,800 jobs from June to July.

Sonoma County's builders are keeping busy despite a slowdown in new home construction, according to industry officials. Construction companies are staying busy with commercial projects, remodeling jobs and public works projects, including roads and schools.

The tourism industry also continued its growth, adding 200 jobs since June.

Statewide, unemployment rose to 5.5 percent in July, compared to 5.2 percent in June and 5.3 percent a year ago. The U.S. jobless rate was 4.9 percent in July.

"Compared to the state and nation, we're in A-plus territory," Stone said. But the housing slowdown could put a damper on future job creation, he said.

Sonoma County's July unemployment mirrored other North Bay counties, where seasonal trends drove rates higher.

"All the counties saw an increase," Furrell said.

Public sector employment dropped 5,000 jobs since June, mostly reflecting schools' summer recess.

In Mendocino County, the July jobless rate was 5.5 percent, up from 5.1 percent in June and 5.2 percent in July, 2006.

In Lake County, unemployment rose to 7.5 percent in July, up from 7.2 percent a year ago and in June.

You can reach Staff Writer Steve Hart at 521-5205 or steve.hart@pressdemocrat.com.