California Unemployment Rate Jumps to 10.1 Percent

By: Don Thompson AP
By: Don Thompson AP

SACRAMENTO (AP) - California's unemployment rate jumped to 10.1
percent in January, the state's first double-digit jobless reading in a quarter-century.

The jobless rate announced Friday by the state Employment Development Department represents an increase from the revised figure of 8.7 percent in December.

A year ago, California's unemployment rate was 6.1 percent. Since then, steep declines in the construction, finance, information and retail industries have put thousands out of work.

The number of people without jobs in California soared to more than 1.8 million, up 754,000 from January 2008.

Stephen Levy, senior economist for the Palo Alto-based Center for Continuing Study of the California Economy, said the last time California's unemployment topped 10 percent was June 1983.

"They're confirming what we already know, which is that we're in a very, very deep recession that is going to last for many months," Levy said.

Nonfarm payroll jobs declined by 494,000, or 3.3 percent, from a year ago, according to the state's survey of California businesses. A separate federal survey of households showed a drop of 283,000 jobs from December, or a loss of 437,000 jobs from January 2008.

Of California's jobless, nearly 1 million had been laid off while about 127,000 left their jobs voluntarily. The others were new to the labor market or were trying to re-enter.

In a statement, Gov. Arnold Schwarzenegger said the unemployment
numbers released Friday are "a sobering reminder" that rejuvenating the state's economy should be government's top priority.

The two-year state budget package approved last week includes economic stimulus measures, relaxed environmental rules for some
construction projects and incentives for small businesses that hire more workers.

"It is extremely important that we put people back to work. This is why we negotiated all the extra pieces in the budget," Schwarzenegger said during a Friday campaign event in Fresno to promote six budget-related measures that will appear on the May 19 special election ballot.

The last time California's unemployment rate was over 10 percent was during a 12-month period that ended in June 1983.

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