Economic crisis costing local jobs

<p>Sonoma County's jobless rate hit 5.8 percent in September -- its highest mark for that month since 1993 -- as troubles in the housing and finance sectors spread to other parts of the economy.</p><p>For the first time in more than a year, local employers cut more jobs last month than they created.</p><p>Sonoma County unemployment is starting to reflect a widening downturn in the U.S. economy, said Ben Stone, director of the county's Economic Development Board.</p><p>"There's a ripple effect," said Stone. "I think it will continue to spread."</p><p>Tourism, wine and retail are starting to feel the pinch as consumers cut back on spending, he said.</p><p>Thanks to seasonal hiring, September's jobless rate was down slightly from July and August, when it hit 6.1 percent -- the highest mark in more than 13 years.</p><p>"Seasonal trends dominated the month's job changes," said Devla Singh, a labor market analyst for the state Employment Development Department.</p><p>Student job-seekers returned to school and farm employment edged upward last month, she said.</p><p>September's unemployment would have been higher without those factors, said Robert Eyler, an economics professor at Sonoma State University.</p><p>"If you took out the seasonality, it would likely be around 6 percent," he said.</p><p>There were 15,800 Sonoma County job-seekers unable to find work in September, up from 11,700 a year ago, when unemployment stood at 4.4 percent in Sonoma County.</p><p>Going forward, the county's job market could worsen, Eyler said. Unemployment could rise in October because of last week's meltdown on Wall Street and paralysis in the credit markets, he said.</p><p>Sonoma County job growth has slowed since March, but it hasn't been in negative territory since August 2007. The county lost 700 jobs in September, compared to a year ago, dropping employment to 198,300.</p><p>Employment in real estate, banking and government is down from last year, as the housing industry's problems spill over to other sectors.</p><p>The public sector was the biggest loser, down 2,000 jobs from 2007, according to the state report. Cash-strapped cities, school districts and other public agencies have cut payroll as they wrestle with shrinking budgets.</p><p>Construction is down 600 jobs from last year, and finance, including banking and real estate, lost 200 jobs.</p><p>Transportation, trade and utilities gained 1,000 jobs over the past year, while business and professional services added 600 new positions.</p><p>Health care gained 300 jobs, and manufacturing added 100.</p><p>Sonoma County's housing market should stabilize in mid-2009, according to a report released Friday by Moody's Economy.com.</p><p>But the county's technology, tourism and wine industries remain at risk from a continuing freeze in the global capital investment markets, the report said.</p><p>"The pace of near-term economic recovery will depend closely on the global economy and U.S. domestic investment," said Steve Cochrane, a Moody's economist who follows Sonoma County job trends.</p><p>Mendocino County's jobless rate for September was 6.4 percent, down from 6.5 percent in August but up from 4.8 percent a year ago.</p><p>Lake County unemployment was 10 percent last month, up from 9.8 percent in August and 7.6 percent a year ago.</p><p>California's unadjusted jobless rate held steady at 7.7 percent in September, the second straight month it has remained at its highest level since March 1996.</p><p>Statewide unemployment is higher than the national rate, which also was unchanged at 6.1 percent in September.</p><p>The economic slowdown is straining the state's unemployment insurance fund, which is expected to run out of money in January after paying out more than $2.4 billion in the last three months.</p><p>The fund is projected to have at least a $1.6 billion deficit by the end of 2009, growing to $3.5 billion by the end of 2010 unless the Legislature boosts the fund's revenue or cuts its payouts.</p><p>Currently, employers pay $104 to $434 into the fund annually for each employee.</p><p>Once the fund runs dry, the state plans to continue paying out benefits to unemployed workers by borrowing money from the federal government, with no interest penalty unless the state fails to repay the loan by next September.</p><p>This article includes information from the Associated Press. You can reach Staff Writer Steve Hart at 521-5205 or steve.hart@pressdemocrat.com.</p>