Los Angeles County's unemployment rate hit a five-year high of 7 percent in June, fueled by losses in education and health services, according to a report released Friday.

The region's jobless rate for June was up from 6.7 percent in May and was well above 5 percent from a year ago.

"This report is not good news at all," said Jack Kyser, senior vice president and chief economist for the Los Angeles County Economic Development Corp. "You can look at what happened from May to June and see that a few industries saw employment gains. But year over year ... there were some pretty significant declines."

Civilian employment in L.A. County declined by 26,000 in June to 4,597,000, while unemployment rose by 14,000 to 346,000 over the month.

From May to June, educational and health services lost 7,600 jobs.

Significant year-over-year job declines were also seen in construction and financial services.

Building foundation and exterior contractors weathered a 16.3 percent yearly decline, losing 4,000 jobs, while building finishing contractors saw their work force lose 4,300 jobs.

All told, the construction sector shrank by 11,600 jobs - the county's biggest annual loss.

In financial services, two categories dealing with credit intermediation suffered job declines of 18.5 percent and 15.2 percent, respectively.

That equated to 5,400 lost jobs.

Other significant losses were posted in trade, transportation and utilities (down 8,500) and manufacturing (down 7,800).

Kyser also noted heavy annual losses (9,200) in the county's motion picture and sound recording industry.

The Screen Actors Guild is currently in bargaining talks with the studios, but that effort has reached a stalemate.

The guild says the proposed contract doesn't adequately address the key issues of DVD residuals and Internet coverage. Work has already slowed down in anticipation of a possible strike.

"In L.A. County, there are currently just three feature films in production," Kyser said. "Normally there'd be eight to 15 in production. There's a big ripple impact from the slowdown."

The failure of Pasadena-based IndyMac Bancorp Inc. - which has since been taken over by federal regulators and is now operating as IndyMac Federal Bank FSB - will add to the woes as the year moves forward, he said.

"There has been a whole string of bad economic news and this just adds to the fear," Kyser said. "I think that situation is really frightening people."

Days before the bank's takeover, IndyMac announced its was laying off 3,800 of its 7,200 workers.

San Gabriel Valley cities with the highest unemployment rate for June were Baldwin Park (8.9 percent), El Monte (8.8 percent), South El Monte (8.6 percent) and La Puente (8.4 percent).

Other cities posted much lower jobless rates. Sierra Madre's was 2 percent and La Ca ada Flintridge and La Habra Heights were both 2.5 percent.

Bob Machuca, regional manager of business assistance for the San Gabriel Valley Economic Partnership, said local companies are being creative in their efforts to hang on to employees and avoid layoffs.

"They are going to three- or four-day workweeks and maybe cutting back on hours," he said. "Others are asking employees to delay taking vacations, or they are cutting back on overtime and slashing executive perks."

Machuca said businesses are essentially battening down the hatches.

"You hear all of these horror stories about business, but we're not going downhill," he said. " We are a very innovative county and so is the San Gabriel Valley. Businesses are hanging tough."

California's unemployment rate rose to 6.9 percent in June, up from 6.8 percent the previous month and 5.3 percent a year ago.

kevin.smith@sgvn.com

(626) 962-8811, Ext. 2701

(c) 2008 San Gabriel Valley Tribune. Provided by ProQuest Information and Learning. All rights Reserved.

Story Source: San Gabriel Valley Tribune