By Don Thompson, Associated Press
SACRAMENTO, Calif. (AP) -- California's jobless rate grew for the second straight month in August to 12.1 percent, led by continued sluggishness in the construction industry, the state Employment Development Department said Friday.
The unemployment rate had been declining since March until it spiked back to 12 percent in July. California's rate is the second highest in the nation, behind Nevada's 13.4.
"I would say it's a flat market," said Brad Kemp, director of regional research with Beacon Economics in Los Angeles. "I just think we have to get used to the fact that slow growth is the path that we're on, and I don't think that's going to change anytime soon."
Nonfarm payroll jobs fell by 8,400 during the month, with the construction industry suffering the biggest decrease, down 7,200 jobs.
The unemployment rate was a slight improvement from a year ago, when it was 12.4 percent. During the 12-month period that ended in August, California gained 171,000 jobs, even as nearly 2.2 million residents remained jobless.
Kemp said the uptick in last month's unemployment rate shows the state should not expect any dramatic improvement for at least the next year.
Two factors are contributing to the slow recovery, he said. First, employers began adding jobs last year when it looked as if the economy was rebounding. With uncertainty prevailing, they are absorbing those jobs before hiring again. Also, any growth in private industry jobs is being offset by public sector layoffs, as state and local governments adjust to lower revenue.
The state reported that six categories lost 17,500 jobs in August: construction; information; financial activities; educational and health services; other services; and government.
Five categories added 9,100 jobs last month. They were mining and logging; manufacturing; trade, transportation and utilities; professional and business services; and leisure and hospitality.
"You've got to have a long-term vision of the economy getting better before you see employers making any significant moves," Kemp said.
Aside from California and Nevada, Florida, Georgia, Michigan, Mississippi, North Carolina, Rhode Island and South Carolina all had unemployment rates of greater than 10 percent.
The national unemployment rate remained at 9.1 percent for a second month.
While construction firms and governments have been dropping jobs, retail hiring was up last month for only the second time since January, said Kevin Callori, a spokesman for the state's Employment Development Department.
Moreover, manufacturing jobs have increased in nine of the past 11 months, adding 22,000 jobs over that 11-month period. That reverses a trend that saw a loss in manufacturing jobs in 34 of the 38 months ending Sept. 2010.
"Over the year, we're still doing pretty well," Callori said.