California Unemployment Rate Rises To 12 Percent In July 2011

08/19/2011 08:42 pm ET | Updated Oct 19, 2011

By Adam Weintraub, Associated Press

SACRAMENTO, Calif. (AP) -- The unemployment rate in California climbed again, hitting 12 percent in July as the state added just 4,500 payroll jobs for the month, officials said Friday.

The report by the state Employment Development Department showed much weaker job growth in July than June, continuing what has been a spotty economic recovery with big variations between regions of the state.

Coastal regions with strong technology export industries continued to show solid economic performance and frequently outpace national growth rates, while the Central Valley and Inland Empire lag well behind, said Steve Levy, senior economist at the Center for the Continuing Study of the California Economy, in Palo Alto.

"It's really a tale of two Californias by geography, by sector, and when you put them together it's disappointing," he said.

The state jobless rate rose from 11.8 percent in June and hit 12 percent for the first time since March. Most industries added jobs, but big reductions in government payrolls shrank the net gain.

California still has the second-worst state unemployment rate in the nation, behind Nevada at 12.9 percent. The national rate in July dropped slightly to 9.1 percent.

A survey of California businesses in July counted 14.1 million payroll jobs, up by 189,400 jobs, or 1.4 percent, since July 2010.

That's roughly enough to keep up with recent population growth in the state but not to recover from the loss of about a million jobs in the past five years during the housing bust and recession.

California continues to show wide economic variation from region to region.

The jobless rates in the San Francisco and San Jose metro areas stayed unchanged in July at 8.8 percent and 10.4 percent, respectively.

Los Angeles lost 30,600 jobs in the month and saw the jobless rate increase from 12 percent to 12.4 percent.

Inland areas hardest hit by the housing bust also stayed weak. The Stockton area lost 14,400 payroll jobs and saw unemployment rise from 16.6 percent to 17.5 percent. Imperial County, east of San Diego along the Mexico border, lost 1,600 jobs and saw the jobless rate climb from 29.7 percent to 30.8 percent.

The economic sputtering echoes the status of the U.S. economy. Jobless rates rose in more than half the states for the second month in a row.

Hopeful signs on hiring early in 2011 grew weaker after April, and stocks have plunged over the past several weeks amid growing fear that the economy will stay weak for a prolonged period.

The latest numbers came as state government turns up the rhetoric on jobs. Gov. Jerry Brown named former bank executive Michael Rossi as his senior jobs adviser and Senate President Pro Tem Darrell Steinberg, D-Sacramento, says he intends to focus on jobs and streamlining state business regulations for the rest of the legislative session.

Jobs and the economy loom over the state's finances. The budget approved by the Legislature's Democratic majority assumed the economic recovery would bring in $4 billion more than projected early in 2011. If that assumption proves wrong, it would trigger billions in additional cuts to schools, universities and other government services.

The California Republican Party jumped on the latest unemployment numbers as evidence that Democratic policies are failing.

"Instead of piling on more job-crushing bills, the Democrats should vacate Sacramento and give California business owners a chance to turn things around," state GOP chairman Tom Del Beccaro said.

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