California unemployment increases to 12.5 percent |

California unemployment increases to 12.5 percent

Cathy Bussewitz
Associated Press Writer

SACRAMENTO, Calif. (AP) – California’s unemployment rate grew slightly to 12.5 percent in January, the state Employment Development Department reported Friday. But the state also revised its December job numbers to show that about 300,000 additional jobs were lost that month.

The state’s unemployment rate in December was 12.3 percent. Officials had previously reported December’s unemployment rate at 12.4 percent, but revised that figure Friday.

Meanwhile, the national unemployment rate held steady at 9.7 percent.

“There are real people behind these statistics and they deserve real action by their elected officials,” Gov. Arnold Schwarzenegger said in a statement, urging the Legislature to pass his job-creation proposal.

Despite the increase in unemployment in January, the state added 32,500 jobs. The construction industry saw the largest increase with an additional 16,200 jobs.

The information, financial activities, and professional and business services industries were the only ones that lost jobs.

“It is a sign that the sector worst hurt by this recession, the construction industry, may finally be growing again,” said Jed Kolko, associate director at the Public Policy Institute of California. “The increase in employment that we see now is consistent with the slow increase in housing prices in California that has been recently reported.”

But those positive numbers should be read with caution, one economist said, because the state significantly revised the number of jobs that were lost in December. California had 13.8 million jobs in December, revised from the 14.1 million that was previously reported. That means the state had 300,000 fewer jobs in December than it previously thought.

“The recession was a lot deeper in 2009 than the previous data had reported,” said Stephen Levy, director of the Center for Continuing Study of the California Economy.

He added that the downward revisions of job estimates throughout 2009 explain the state’s high unemployment numbers.

Even so, Levy remains optimistic.

“I do think that we are at the beginning of a recovery,” Levy said. “But it shows … that we’re starting at a lower point than we previously thought. So we have farther to dig out.”

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