California unemployment steady at 12.6 percent

May 21, 2010 6:29:59 PM PDT
California's unemployment rate held steady last month at 12.6 percent, despite an increase in national unemployment, the state Employment Development Department reported Friday.

A few more Californians found jobs last month with the leisure and hospitality industry adding the most private sector positions. It's a sign the struggling labor market may be strengthening.

"Now we have to wait to see what kind of momentum it starts gaining in an economic recovery," Loree Levy from the California Employment Development Department said.

The momentum appears to be there. In each of the first four months of this year, the state has gained an average of 14,100 jobs. While that number seems small, compare that to the same period last year when California lost an average of 106,000 jobs a month.

Though the signs are encouraging, unemployment remains high at 12.6 percent because discouraged workers who quit looking for a job a while back have begun applying again.

Regina Vasquez recently restarted her job search and is still frustrated.

"Well, they're saying there are more jobs, but I don't see any different," she said.

Still unclear is how the public sector will affect unemployment numbers in the coming months. Just a week ago, Governor Arnold Schwarzenegger proposed eliminating or paring back numerous social services that employ thousands.

Democratic leaders say the state should postpone more than $2 billion in corporate tax breaks.

"Better to delay corporate tax breaks for a couple of years, at least until times get better than to completely decimate the public sector," Senate President Darrell Steinberg, D-Sacramento, said.

But Schwarzenegger argues corporate tax breaks and other incentives help create private sector jobs.

"When you do that you have more people paying taxes and more money to pay for those programs that we don't want to make cuts to," the governor's press secretary Aaron McLear said.

Besides the job gains, other good signs in California's economy include a 12 percent jump in venture capital funding for startups in the first quarter and cargo traffic is up for the fifth straight month at the Los Angeles and Long Beach Ports.


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