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County unemployment rises to 11.3 percent in January
Published: Wednesday, March 10, 2010 at 1:08 p.m.
Last Modified: Wednesday, March 10, 2010 at 1:08 p.m.
Sonoma County unemployment rose to 11.3 percent in January, when a record 28,600 residents were looking for work, state labor analysts reported Wednesday.
And the jobless rate could climb higher this year as the economy stages a painfully slow recovery from recession, according to a new forecast.
Unemployment has hovered above 10 percent in Sonoma County since last June, when the jobless rate broke double-digits for the first time since 1983. It likely won’t fall below that mark until 2011, according to the forecast by Moody’s Economy.com, which tracks the county’s labor market.
“We’ll probably see it increase through the middle of the year,” said Ben Stone, who heads Sonoma County’s Economic Development Board.
County unemployment typically jumps from December to January as the retail and hospitality sectors cut temporary staff after the Christmas season.
But those industries were particularly hard hit in January, down 1,700 jobs over the month. Employment in construction, communications, government, manufacturing and finance also fell from December.
Overall, Sonoma County lost 3,800 jobs between January and December, when the jobless rate was 10.3 percent.
But there are signs the recession may be easing. Job losses slowed for the fourth straight month, compared to the same period a year earlier. The county has shed 10,800 jobs during the past year, the smallest year-over-year loss since the January 2009 report.
As the economy improves, unemployed workers who stopped looking for jobs will return to the labor force, said Eduardo Martinez, senior economist for Moody’s Economy.com. The influx will likely drive the jobless rate upward. People who are unemployed but have stopped looking for work are not counted in the jobless rate. If the labor force grows faster than jobs are created, the unemployment rate will continue rising.
“People are going to be getting back into the workforce as the economy recovers,” Martinez said. “They’re going to be looking for jobs.”
After two years of contraction, the county’s $17.2 billion economy is expected to expand 3 percent this year, Martinez said. But progress will be slow.
The wine industry should benefit from lower prices, increased foreign demand and growing U.S. consumer confidence, he said.
Sonoma County’s technology sector is getting a boost from federal stimulus money and new venture funding.
But California’s budget problems will be a drag on the recovery, as school teachers and other government workers continue to lose their jobs, he said.
And the housing industry will remain weak, with new foreclosures keeping home prices down.
Overall, the county will lose 1,400 jobs this year before job growth resumes in 2011, according to the Moody’s forecast.
Still, Sonoma County has a lower jobless rate than all but 10 other California counties. With seasonal factors included, statewide unemployment was 13.2 percent in January. U.S. unemployment was 10.6 percent in January, with seasonality factored in.
In Mendocino County, the jobless rate was 12.7 percent in January, up from 11.5 percent in December.
In Lake County, unemployment was 19.6 percent, compared to 18.5 percent the prior month.
Napa County had a rate of 11.1 percent, up from 10.2 percent in December.
Soaring job losses have strained the state’s unemployment insurance system. California paid a record $20.2 billion in jobless benefits last year and processed 6.5 million first-time claims.
The system’s phone lines are jammed with more than 1 million calls a day, and many callers can’t get through.
The Employment Development Department’s Web site has seen a 43 percent increase in online applications and nearly 700 percent more inquiries.
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