California Jobless Rate Swells to 12.6 Percent

April 16, 2010 12:00:00 AM PDT
There are new signs of life in the California economy. A report from the Employment Development Department shows thousands of people were able to find work last month.

Still, despite the addition of 4,200 new jobs, the unemployment rate has now swollen to a new modern record -- 12.6 percent. That number breaks the modern record. During the first two months of this year, the jobless rate stabilized at 12.5 percent, which was widely seen as a sign of a possible turnaround. A year ago, in March 2009, the rate was 10.6 percent.

The job market is considered a lagging indicator, meaning other parts of the economy will see improvements first. The waiting game though, can certainly be frustrating.

While experts keep talking about some positive signs in the economy, California's job market is still bad.

The news is discouraging for the 2.3 million Californians looking for work, especially for people like Deborah Cherry. She hasn't had a steady job since June 2008 and wonders when the positive signs will trickle down to her.

"I see that there may be possibly some recovery, but it's extremely, extremely, slow," says Cherry.

Economists note, though, California added jobs each month this year, a gain of more than 32,000 jobs, but not enough to keep unemployment at bay.

"Some people dropped out of the labor force, quit looking. Now as things get better, they come back to labor force faster than jobs are created and that's why we can have some job growth, but still have rising a unemployment rate," says UC Davis economist Phil Martin.

Unemployment checks normally last 26 weeks. The new report also shows the number of Californians without jobs at least 27 weeks ballooned to 800,000. That's twice as many people as a year ago. Congress has extended benefits five times to an unprecedented 99 weeks, and still that's not enough.

"Here in California, there's about 85,000 people who've already exhausted all available benefits to them. By the end of this week, we expect that number to be like around 100,000," sasy Loree Levy from the state Employment Development Department.

Rising unemployment and a 99-week cap on benefits makes many nervous. Eva Thompson has been pounding the pavement for a year now.

"The numbers keep going up. You start thinking, you know, am I in that category where you're going to be the homeless?" says Thompson.

Next month's numbers may not be all that great either. The 12.6 percent unemployment rate does not reflect the thousands of people laid off when the NUMMI plant closed down two weeks ago.


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