SAN FRANCISCO, Feb 27 (Reuters) – California’s unemployment rate rose to 10.1 percent in January, the highest level in a quarter century, as recession tightened its grip on the most populous U.S. state.
Weakness in the housing and consumer sectors helped drive the jobless rate up from a revised 8.7 percent in December and 6.1 percent in January 2008, state officials said on Friday.
Economists had expected the jobless rate to climb into double-digits and be well above the national January average of 7.6 percent.
Consumer spending across the state has plunged in the wake of Wall Street’s turmoil and payrolls have been thinned at a rapid pace in recent months. The state, the world’s eighth largest economy, is also suffering from a prolonged housing downturn.
“There is continued weakness in housing-related sectors and we’re also seeing weakness in consumer-related sectors,” said Kevin Callori, a spokesman for the state’s Employment Development Department. “The credit crunch is making consumers less confident so that’s affecting businesses in wholesale and retail trades.”
“Basically about a third of the losses (over the past year) have been in consumer-oriented industries,” Callori said. “Another third have been in housing and housing-related industries like construction and financial services.”
State officials said California lost 79,300 nonfarm payroll jobs in January from December and a total of 494,000 nonfarm jobs from a year earlier, or 3.3 percent of the state’s nonfarm payrolls. (Reporting by Jim Christie; Editing by Leslie Adler)
