California Joblessness Steady at 7.7%

California's unemployment rate held steady at 7.7% in September, remaining at its highest level in 12 years, according to the Los Angeles Times. Economists are now warning that joblessness is likely to jump once October numbers are tallied. The new data from the California Employment Development Department reflect a continually weakening state economy buffeted by falling home prices, little construction activity, declining consumer demand and government belt-tightening. What the new state numbers did not show was the effect of a global financial crisis that froze credit and panicked stock markets beginning in mid-September, just after the monthly employment surveys were conducted. "The economic situation has deteriorated dramatically in the last month, and, unfortunately, I think the snowball is gaining momentum," said Sung Won Sohn, an economist at Cal State Channel Islands. "It's going to get worse." Sohn, who also is vice chairman of clothing-store chain Forever 21, predicted that October's figures would show "significant layoffs" in financial services and retail trade. "Most retailers expect this holiday shopping season to be at best flat in dollar terms and be down in volume terms," he said. One major retailer, the Mervyns department-store chain, announced Friday that it would mark the upcoming holidays with a going-out-of-business sale. The Hayward company is closing 149 stores, mainly in California, and eliminating more than 10,000 jobs. Retail's poor prospects could further weaken a state economy that lost 77,200 jobs between September 2007 and September 2008, according to the Employment Development Department. The biggest declines were in construction; financial activities, including the mortgage industry; and manufacturing.

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Google Video | October 23, 2008

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