The sectors that are getting hit the hardest at this point in the cycle are construction, manufacturing, information/technology, retail trade, financial, professional/technical, and leisure/hospitality. Public sector job losses, while non-existent in this cycle until July 2009, accelerated in September 2009. We believe that they will accelerate yet more sometime during 2010 as the state government eventually becomes forced to layoffs as a way to contain deficit and debt growth.

How has Los Angeles County’s job market fared during this cycle compared with the early 1990s? This is an interesting question as Los Angeles County had a major downsizing of its aerospace and defense industries during the 1990s, resulting in a much worse economic contraction than the United States had.

From the chart below, we see that, so far, Los Angeles County is not suffering as much as it did during the 1990s. The severity has been about as bad, but monthly job changes at or worse than 4 percent losses have been limited to only 6 months during this cycle as compared with 17 months during the 1990s. If the recent moderation in Los Angeles County job losses continues, then the County will still be able to say that the 1990s cycle was the worse-ever for them.

The Los Angeles County July 2009 job report is similar to California’s, with the unemployment rate historically high and job declines that are nearly historically high. The July 2009 unemployment rate of 12.5 percent compares with previous highs of just over 11 percent that were attained in early and mid 1992. The July 2009 year-on-year job loss growth rate of 4.2 percent compares with losses of 4.7 percent in January 1992. These comparisons indicate some similarity between the two cycles for Los Angeles County. However, the peak-to-trough job losses (thus far) are different. The job-loss during the 1990s was 562,000 jobs (13.4 percent) and thus far in this cycle the loss is 307,000 jobs (7.3 percent).

Going forward, if Los Angeles County continues to lose jobs at similar rates as in July then the total job losses in this cycle could approach those of the early 1990s. In the early 1990s there were 15 months where job losses exceeded 4 percent over the prior year. Thus far in this cycle, there have only been 4 such months. If the severity of the job losses subsides soon, then Los Angeles County’s total job-loss in this cycle will likely not exceed that of the early 1990s.