April 19th, 2009 20:38 EST
Unemployment Reaches New Record-High in California
California state`s unemployment rate jumped to a record of 11.2 percent in March: a figure which is predicted to escalate. Experts anticipate hefty job cuts will affect most industries throughout the course of 2009. The state`s March unemployment report was released earlier on Friday.
Steve Levy, economist for the Continuing Study of the California Economy, said: "This is the worst recession since the Great Depression and it`s not over. We have at least six more months of job losses."
California`s unemployment rate well exceeds the national unemployment rate for March at 8.5 percent and is the highest jobless rate in California since the Federal government began gathering state unemployment information.
At 11.2 percent, this mark represents a significant hike from the month of February which was reported at 10.6 percent. The state`s unemployment rate was 6.4 percent one year ago: a 4.8 percentage difference within 12 months.
Steve Levy also claimed that California will likely experience serious job losses before a greater percentage of the state`s labor force waits for employment.
The unemployment report released by the state`s Employment Development Department showed that 62,000 nonfarm payrolls jobs were cut in March from the figure in February. Nonfarm employers slashed 637,400 positions from the same time last year, accounting for a 4.2 percent drop in the state`s nonfarm payrolls from 2008.
In comparison to the rest of the nation, California nonfarm payrolls were 0.7 percent worse than the country from last year. Levy said that one contributor to California`s dismal economic climate is its greater exposure to the housing crisis and the extensive payroll slashes in finance and construction.
It was as if the world`s eighth biggest economy was struck by a 11.2 unemployment rate and a complete housing collapse, because California would constitute that title if it was a nation of its own.
With the mortgage panic striking the heart of California`s economy, many regional housing markets are swamped with foreclosures and on-hold housing construction projects. And the outset of California`s situation isn`t predicted to be any time soon, with consumers cutting back spending as a precaution toward the nation`s recession and more impending layoffs around the corner.
Another factor in the spike of the state`s unemployment increases contrasted with the national average is that the state`s workforce has been growing tremendously while payrolls are continually diminishing.
Levy said that since March 2008, around 335,000 new job applicants have become a part of California`s workforce and "became instantly unemployed."
He also said: "If our labor force had been around the national average our unemployment level would be about 10 percent, which is still above the national average and still very painful. We`re a young state and an immigrant-attracting state and that will keep the unemployment rate higher. We offset that during recoveries by having above-average job growth... and that`s the only way we will close the gap."