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Calif. unemployment expected to grow

June 5, 2009 12:00:00 AM PDT
New unemployment figures were released Friday by the U.S. Department of Labor. The rate is up but the number of newly laid-off people eased somewhat. The nation's unemployment rate shot up to 9.4 percent, the highest rate in more than 25 years. It's a half-percentage-point jump from April.While the national job loss number has slowed down, California already has had two straight months losing fewer jobs. For some of the 2 million Californians who've been looking for work, like former real-estate broker Myrna Hubbard, that's a good sign.

"It's good news because once I do get hired, my chances of staying on the job are much better," said Hubbard.

But there's no popping the champagne just yet.

"We probably can still anticipate more layoffs to come, and we're certainly seeing more indications of that," said Loree Levy, Calif. Employment Development Dept (EDD).

Large companies must give the state a two-month notice that they plan to lay off 50 or more workers.

In all of 2005, employers told EDD more than 15,800 layoffs would happen. Last year, the state was notified of 81,300 layoffs. This year is on pace to surpass that.

In the first five months of 2009 alone, companies were ready to hand out nearly 72,000 notices.

The business community warns that layoffs could actually be worse because those filings only reflect companies with more than 75 employees.

"Most of the employment in California is with small business," said Loren Kaye, Calif. Foundation for Commerce and Education. "Small businesses are the engine of the economy. You're not going to tell what they're doing through those notices."

But some companies file layoff warnings with the state just to cover themselves because there are huge financial penalties if they do not.

So if things start looking up, there might be a chance those layoff warnings with the state could be rescinded.

"Things like consumer spending, investment in businesses like equipment -- if that looked better, they would think twice about their ideas of layoffs," said Howard Roth, Ph.D., Chief Economist, California Department of Finance.

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