Nevada County unemployment highest in a decade
December 17, 2008
GRASS VALLEY “-Nevada County’s unemployment rate continues to climb to the highest rate in more than a decade, standing at 7.2 percent in October.
The rate hasn’t climbed above 7 percent in more than a decade, either. In January 1998, the unemployment rate stood at 6.9 percent. A year ago, it was just 4.8 percent.
The figures, compiled by the state Employment Development Department, and are a clear sign of the deepening recession, affecting consumers and businesses alike, according to economists. Nevada City has the area’s highest unemployment rate, at 10 percent.
The high unemployment rate stems from many factors, including the recession, credit squeeze, tightening credit market, real-estate slowdown and winding down of the tourist season, according to local experts. Despite talk of diversifying the economy, real estate, tourism and construction are among the area’s biggest ” and hardest hit ” industries.
“It’s going to continue to rise,” said county Economic Resource Council chief executive Gil Mathew, referring to the unemployment rate.
The county’s unemployment rate could reach 10 percent by spring, according to some reports that Matthew has read.
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“It’s huge, and that’s what I’m concerned about,” said Mathew. “I think you’re going to see more of a rise in the next six months.”
The unemployment figures were released on the same day the Federal Reserve cut interest rates to historic lows ” putting it at zero to 0.25 percent. Stocks surged on the announcement, with the Dow Jones industrial average closing up 359.61 points.
Though a rate cut to zero might help, it likely won’t stimulate the economy for a while, Mathew said.
“There’s a ‘dwell’ time before companies can take advantage of that,” he added.
Many economists are predicting the recession won’t end until late 2009 at the earliest, Mathew said.
California’s jobless rate is 8 percent, up from 5.4 percent a year ago.
Despite the bleak economy, business should use what he called “down time” to figure out long-term economic goals, said Steve Frisch, president of the Sierra Business Council in Truckee.
“Don’t spend the down time bemoaning the past, but look to the future,” said Frisch. He said it’s also a good time to discuss how to diversify the economy beyond tourism, which drives the area.
The Sierra Business Council also is doing its part to reinvest in the local economy, choosing local businesses for its printing and janitorial services, for example. “That’s going to help us out, especially in the rural counties,” he said.
Nevada City’s double-digit unemployment rate comes as council members have given their blessing to a federal grant that could provide up to $300,000 to expand or attract businesses.
“There will be some jobs created by this,” said city manager Gene Albaugh, but he added it will not be enough to sharply reduce the city’s unemployment rate.
As first reported in The Union, a plan to relocate California Organics to the vacant Broad Street Furnishings Building at the foot of Broad Street remains under negotiation, with a goal of completing the deal at year-end, sources said.
To contact Staff Writer David Mirhadi, e-mail firstname.lastname@example.org or call 477-4239.
Labor force: 51,620
Unemployed (number): 3,700
Unemployed rate: 7.2%
Labor force: 5,880
Unemployed (number): 380
Unemployed rate: 6.4%
Labor force: 1,760
Unemployed (number): 200
Unemployed rate: 11.1%
Labor force: 9,930
Unemployed (number): 580
Unemployed rate: 5.8