Unemployment in California hits 70-year high
Washington, Sep 19 (Inditop.com) Unemployment rate in California, a favourite stomping ground for Indian IT professionals, hit its highest point in nearly 70 years amid early signs of economic recovery in the United States.
While job losses continue to fall, the state’s new unemployment rate of 12.2 percent, according to the Bureau of Labour Statistics, is far above the national average of 9.7 percent and places California, Americas’s most-populous state, fourth behind Michigan, Nevada and Rhode Island.
Statistics kept by the state show California’s unemployment rate was 14.7 percent in 1940, the New York Times said citing a spokesman for the California Employment Development Department.
While California has convulsed under the same blows as the rest of the country over the last two years, its exposure to both the foreclosure crisis and the slowdown in construction – an industry that has fuelled growth in much of the state over the last decade – has been outsized, it said.
Total building levels in California have fallen to $23 billion this year from $63 billion in 2005; home building this year is less than a quarter of what it was in 2005, according to the Centre for Continuing Study of the California Economy.
Roughly 500,000 of the state’s job losses have been in construction, finance, real estate and industries related to construction.
“We were at the epicenter of the housing bubble, and we are at the epicenter of the fallout,” the Times quoted Stephen Levy, senior economist and director of the centre as saying. “The reason we are doing worse in California than other states is construction.”
While California has enjoyed some signs of a comeback in recent months, unemployment, which is often the last economic indicator to turn around in a protracted recession, is expected to remain high for the near future, the Times said.
A recent study by the University of California, Los Angeles, predicted that while the state would enjoy 2 percent quarterly growth in 2010, the unemployment rate would remain above 10 percent.