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Jobless rate rises again

City, chamber brace for high unemployment in SCV

Posted: April 17, 2009 10:22 p.m.
Updated: April 18, 2009 4:30 a.m.

While the stock and housing markets seem to be crawling out from under their respective rocks, local experts say unemployment rates will continue to climb.

Santa Clarita’s unemployment rate reached 7 percent in March, a two-tenths increase from February’s numbers, according to California’s Employment Development Department numbers released Friday. The Los Angeles County rate hit 11.3 percent, which was 2.8 percent above the national rate.

“We probably won’t expect to see the highest unemployment rates until next year,” said Mark Schniepp, director of the Santa Barbara-based California Economic Forecast.

That doesn’t necessarily mean dire job losses will continue into next year. But it could mean that even a recovering economy won’t be able to immediately absorb new entrants into the job market, Schniepp said.

“Job declines will start coming down as the stock market improves and housing sector improves and we see a number of other indicators start to grow again,” he said. “But you get a lot of new entrants into the labor force. People graduate from high school and college. That’s how unemployment rises. The economy just can’t absorb all these new entrants.”

Stock futures pushed slightly higher Friday as investors sifted through better-than-expected earnings reports from banking giant Citigroup Inc. and industrial conglomerate General Electric Co. There has been a growing sense on Wall Street that the economy is starting to stabilize. But investors are looking to first-quarter earnings reports for confirmation that business conditions are, in fact, improving. Stocks closed at their highest level in more than two months Thursday as investors were heartened by better-than-expected reports from JPMorgan Chase & Co. and Nokia Corp.

The housing market also is seeing some glimmers of hope.

“I do think it is stabilizing a little bit, especially in the lower ranges,” said Nancy Starczyk, president of the Southland Regional Association of Realtors Santa Clarita Division. “There are lots and lots of buyers out there. Inventory is still low.”

However, Starczyk said Realtors are still waiting to see how a recently lifted national moratorium on foreclosures might affect the market. If foreclosures, previously held back by the moratorium, are brought back onto the market gradually, that could keep things steady, Starczyk said.

The median price of the 167 single-family homes sold in the Santa Clarita Valley in February was $408,000, down 16.7 percent from a year ago but up 3 percent from January. January also saw a 2.9 percent increase compared to December.

“The median price is holding steady and we’re seeing it definitely hold steady in Santa Clarita, so that’s encouraging,” Starczyk said.

Jason Crawford, the city’s economic development and marketing manager, agrees that the stock and housing market have shown some signs of life recently. But when it comes to unemployment, Crawford said the city is in preparation mode.

“We’re bracing ourselves for the worst,” he said. “We’re spending a lot of focus on the WorkSource (Center) to make sure it is the best it can be to make sure those people out of jobs can still find jobs.”

Crawford said the city is also in close partnership with College of the Canyons to make sure the types of training offered there are consistent with the training required for growing businesses.

The Santa Clarita Valley Chamber of Commerce is also focusing more heavily on economic development, said Chamber President Larry Mankin.

“Economic development is two words, but it means job creation and job retention and creating community wealth,” Mankin said.

The Associated Press contributed to this report.


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