The County's unemployment rate (not adjusted for seasonality) rose significantly from 13.9% in December to 14.8% in January. Unemployment rates tend to increase in January as seasonal holiday hiring ends. However, this magnitude (+0.9 percentage points) is unusually big by historical standards. The labor force increased by 5,600 in January, indicating that some people may have suspended their job search over the holidays. From the 3/'09 peak of 873,900, the County's reported labor force has fallen by 13,500, or 1.5%. The number of employed residents declined by 2,700 in January. For the 2009 calendar year, the average unemployment rate was 13.0%.
Passenger traffic at LA/Ontario International Airport (ONT) declined in January to 364,582 passengers, a level similar to that of January 2009. In January, container volume at the ports of Los Angeles and Long Beach was 1,001,774 TEUs. The volume was 1.6% above the 1/'09 level.
According to DataQuick, the County's median home sale price declined slightly to $154,000 in December after posting six consecutive months of increases. Sales volume also increased slightly, from 2,751 in November to 2,934 in December.
During 2009Q4, the number of trustee deeds recorded (foreclosures) in the County held steady at 4,994, just 5 fewer than the 4,999 recorded in 2009Q3. The number of foreclosures in the County has stayed near 5,000 per quarter for a year, even though the number of notices of defaults (NODs) has fallen for three consecutive quarters. The pressure on the housing market is still there, but the main source of defaults is now unemployment instead of bad loans. While there are programs to help those with bad loans, there are almost no programs designed to deal with unemployment-induced foreclosures.
In December, 150 residential building permits were issued, compared to 324 issued in 11/'09. Of those, 108 were single-family residences (SFRs) and 42 were multi-family units. SFR activities were mostly concentrated in three cities: Rancho Cucamonga (26), Fontana (25), and Chino (16). All multi-family activities were in Fontana (27), Chino (9), and Ontario (6). SFRs accounted for 57% of all housing units permitted in '09, down from a peak of 92% in '05. For 2009, there were 2,493 units permitted, or 86.5% lower than the level in 2004 when construction activity peaked.
For the fourth consecutive month, and fifth time in 2009, there were no commercial office, industrial, and retail building permits issued in December. For commercial office, it was the sixth consecutive month of no activity. For the past 16 months, there were 12 months in which no commercial office building permits were issued. Compared to the peak year of 2007, office construction was 93% lower in 2009. The County had just one large industrial project permitted in 2009 -- the Dr. Pepper/Snapples plant in Victorville. Compared to the peak year of 2006, industrial construction was 91% lower in 2009. Compared to the peak year of 2007, retail construction was also 91% lower in 2009.
The County's unemployment rate (not adjusted for seasonality) declined slightly to 13.8% in November. The labor force declined by 900 -- rather unexpected since people should be out there looking for seasonal jobs prior to the holidays. From the 3/'09 peak of 888,500, the County's reported labor force has fallen by 17,700, or 2.0%. The number of employed residents increased by 1,900 in November, thanks to strong, seasonal, retail hiring (+5,500 in the two-county area). With the reduction in labor force and a slight increase in employment, the calculated unemployment rate declined as a result.
The total wage and salary employment in the Inland Empire metro area increased by 5,600 in November. This followed a strong increase in October of 8,200 jobs. November's employment figure was 4.6% below the 11/'08 level, the lowest year-over-year decline in a year. The construction sector lost another 1,200 jobs in November. Compared to its peak in 6/'06, this sector has lost 49% of its job base. The manufacturing sector lost another 400 jobs in November. Manufacturing employment is down 26% from its peak also in 6/'06. The logistics sector posted its fourth month-to-month job gain by adding 200 jobs in November. Much of the increase is likely seasonal to meet the needs of retailers during the holiday shopping season. This sector tends to see job losses in January. Retail employment rose in November as expected, but at a rate significantly below the levels during "normal" economic times.
According to both DataQuick and the California Assn. of Realtors, the County's median home sale price rose to $160,000 in November -- the first time the median sale price increased by $10,000 or more since the price decline began in 11/'06. The rush to qualify for the home purchase tax credit may have helped boost the sales volume and price. The credit has been extended to 4/30/2010.
In November, 325 residential building permits were issued, compared to 354 issued in October. Of those, 92 were single-family residences (SFRs) and 233 were multi-family units. SFR activities were mostly concentrated in three defined areas: Rancho Cucamonga (28), Victorville (21), and unincorporated areas (12). All multi-family activities were in Rancho Cucamonga (223) and Ontario (10). There has been a very visible change in the composition of the housing stock being built. During the heydays of the housing boom (2005 and 2006), SFRs accounted for over 90% of newly-built housing. In the past three months, the proportion of SFRs has declined to just 35%. This is of interest to those who monitor the health of the construction sector because compared to SFRs, multi-family units require significantly less labor and cost less to build. For instance, based on the RIMS multipliers, in 2005 a SFR took 2.18 man-years to build, compared to 1.01 man-years per unit for a duplex, 0.96 for a triplex/fourplex, and 0.92 for a complex larger than five housing units.
For the third consecutive month, and fourth time in 2009, there were no commercial office, industrial, and retail building permits issued in November. For commercial office, it was the sixth consecutive month of no activity. For the past 15 months, there were 11 months in which there were no commercial office building permits issued. With the large inventory of default commercial properties out there and the asking prices for some properties actually lower than the cost of construction, financing for new construction is almost non-existent.
According to both DataQuick and the California Assn. of Realtors, the County's median home sale price remained at $150,000 in October -- the fifth month of rising or unchanged median sale price.
In October, 358 residential building permits were issued, compared to 302 issued in September. Of those, 135 were single-family residences (SFRs) and 223 were multi-family units. SFR activities were mostly concentrated in four defined areas: Rancho Cucamonga (62), Fontana (25), Victorville (13), and unincorporated areas (11). All multi-family activities were in Rancho Cucamonga.
Just like in September, there were no commercial office, industrial, and retail building permits issued in October. This is the third time this year that we saw a triple "0". For commercial office, this is the 5th consecutive month of no activity. For the past 14 months, there were 10 months in which there were no commercial office building permits issued. With the large inventory of default or near-default commercial properties out there, financing for new construction is almost non-existent. Industry experts do not expect a recovery in the immediate future.
The total wage and salary employment in the Inland Empire metro area increased by 8,100 in October. October's employment figure was 5.2% below the 10/'08 level, the lowest year-over-year decline in a year. The good news was tainted by the drastic revision of September's numbers. The change in wage and salary employment in September was initially reported as +3,900, but is now revised to -3,200, a 7,100 reversal, or nearly the same amount as October's increase.
The construction sector lost another 1,900 jobs in October. Compared to a year ago, this sector has lost 19% of its job base. The manufacturing sector lost another 600 jobs in October. Manufacturing employment is down 10.5% from 10/'08. The logistics sector posted its third month-to-month job gain in October -- adding 400 jobs again. Much of the increase is likely seasonal as retailers stock up their shelves for the holiday shopping season.
The County's unemployment rate (not adjusted for seasonality) rose to 14.0% in October. The labor force increased by 3,300 in October -- likely due to people gearing up for seasonal jobs. From the March 2009 peak of 888,500, the County's reported labor force has fallen by 18,100, or 2.0%. The number of employed County residents increased by 1,100 in October, the first significant month-over-month increase since April 2008. However, the number of unemployed residents rose by 2,200. The official unemployment rate rose as a result.
What is the "real unemployment rate" that includes discouraged workers and the under-employed? The best national estimate, called U-6, was 17.5% in October, compared with the official national unemployment rate of 10.2%. That's about a 72% increase from the official rate. If we use that ratio and apply it to the County's official unemployment rate of 14%, then we get an estimate of approximately 24%. This figure does not include people who have seen cuts to their hourly wages…
A Few Thoughts About "Green Jobs"
There's much talk about the creation of tons of "Green Jobs" to help get people employed. In his State of the Union address, President Obama said,
Yet the current trends suggests that the number of green jobs may disappoint many of us.
More production/extraction of fossil fuels will generate some jobs, but they are so specialized that nearly all displaced workers will have to get specialized training before they can handle those jobs. And if the exploration companies do not have spare equipment for them, it's very unlikely that those companies would invest in the training of new workers and new equipment if they feel that such political support for fossil fuel production will be short-lived. They will be better off just hold onto their existing sources and get more profit from the more limited supply.
If fossil fuel prices are lowered because of more production, then this inevitably reduces the attractiveness of alternative fuel. This may therefore slightly hinder the development and investment in alternative fuel. Conversely, making fossil fuel more expensive will help the adoption of alternative fuel, but that will most likely have negative impacts on jobs in many other sectors of the economy. This is a tradeoff that is nearly impossible to avoid.
Some "green" activities may actually reduce employment in the long run. For instance, converting a lawn to rockscape removes the need for a lawnmower, and could reduce the number of jobs involved in power generation, water transportation, garbage removal and disposal. Solar water heaters reduce the demand for natural gas and that may reduce jobs in gas exploration and transportation if solar water heaters are more widespread. Those potential reductions in employment are almost never considered in "green jobs" studies.
We must understand that increased environmental protection both creates and destroys jobs. Jobs are the collateral impact of environmental protection, not the reason to pursue it. A good environmental protection policy needs to take into account all costs, including the "human costs" which may include a reduction in jobs, recreation options, and convenience.
It's more likely that the government will choose to pursue environmental regulations without full regard of their impact on the businesses, and the loss of competitiveness will cost U.S. jobs at a time of high unemployment. California manufacturers are already worried about the potential impact of AB32 on their competitiveness. An ill-designed national program may extend that pain to the rest of the country and cost the U.S. more jobs. Since the effect of environmental protection, particularly efforts to reduce the emission of greenhouse gases, is global in nature, such a program needs to be global so the participants are not bearing excessive burdens while non-participants benefit from their sacrifices, both on the climate front and on increased business competitiveness.