Initial applications for unemployment in California soared by 14,570 in the week ending June 20, the highest level since the first week of February, reports the U.S. Labor Department today.

California’s first time claims hit 86,609 in the latest report, confirming an upward trend that began in mid-May after initial filings bottomed at 62,026 the week of May 9. (The decline May 30 likely was due to a short week because of the Memorial Day holiday.)

Initial claims haven’t been this high since the week of Feb. 7, when they hit 90,456.

California officials attributed the latest spike in first-time claims to layoffs in the service industry.

The latest weekly initial claims number does not bode well for California’s June unemployment report, which is due out July 17.  Since California has the largest workforce in the country, it may also explain the large increase in today’s U.S. unemployment report, which showed the country losing 467,000 jobs in June.

Seven other states also saw initial unemployment claims rise by more than 1,000 the week ending June 20.  New Jersey was second after California with an increase of 3,170, which the state attributed to layoffs in the transportation, warehousing and services industries.

The report wasn’t all bad news. Seven state saw first-time claims go down by more than 1,000 led by Missouri which saw a drop of 5,753 filings.  State officials there said it was due to fewer layoffs in the construction, service, transportation and warehousing industries.

Looking ahead, Labor Department officials estimated there were 614,000 initial claims filed nationwide the week ending June 27, a drop of 16,000 from the previous week’s revised 630,000.

Continuing claims declined by 53,000 to 6.7 million, but experts say it may be more due to people exhausting their unemployment benefits rather than an improvement in the job market.

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Hopes that U.S. employment had stabilized vanished today when the Labor Department announced the country lost 467,000 jobs in June, up from a revised 337,000 in May.

The unemployment rate also ticked up in June to 9.5% from 9.4% in May. If workers who want to work full-time but have settled for part-time jobs are included, the unemployment rate was 16.5%.

Since the recession officially began in December 2007, the nation has lost 6.5 million jobs and the unemployment rate has increased 4.6 percentage points. As of June 14.7 million people were out of work.

The June job loss was close to the 473,000 projected by ADP Wednesday in its monthly report on private-sector employment but was dramatically higher than the 363,000 consensus forecast by economists.

Orange County’s unemployment was 8.6% in May.  The June numbers will be released July 17.

Read more on the June unemployment in the AP story HERE.

See the full June Labor Department report HERE.

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California’s budget impasse won’t affect unemployment checks, but the Fourth of July holiday may.

Unemployment benefits are paid from a state trust fund and federal funds so they won’t be subject to the IOUs the state will be sending out to vendors and others paid from the state’s general fund, says Loree Levy, spokeswoman for the state Employment Development Department.

Jobless workers, however, may see their checks delayed due to the Fourth of July holiday.  The EDD office will be open Friday but the call centers and One Stop offices will be closed Saturday for the holiday.  Those services been available half-days on Saturday. The U.S. Post Office also will not be delivering mail.

A notice on the EDD web site says:

“Any continued claim forms received by the Department on Friday July 3, 2009 will be processed and the checks will be mailed on Monday July 6, 2009. The holiday may also impact the receipt or delivery of continued claim forms you may send to or receive from the Department.”

Jobless workers in California have continued to receive benefits checks even though the state’s Unemployment Insurance Trust Fund ran out of money in January. The state has borrowed money from the federal government to keep the checks going out.

The trust fund is supported through employer contributions. However because of the major jump in California’s unemployment — it was a modern-day record of 11.5% in May — employer contributions haven’t kept up. The state now expects the fund to be $17.8 billion in the red by the end of next year.

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It’s not just the unemployed who are hurting.

If you include people who involuntarily are working part-time and those who want a job but have given up looking, the so-called underemployment rate for the nation was 16.4% in May, say the experts at the Economic Policy Institute. The rate for just those who were unemployed was 9.4%.

When the recession started in December 2007, the U.S. underemployment rate — the unemployed, involuntary part-timers and those wanting to work but not looking — was 8.7%.

By the institute’s estimate, nearly 26 million people were underemployed in the U.S. in May, up from 13.5 million in December 2007.

The number of people who are involuntarily working part-time nearly doubled from 7.5 million to 14.5 million. In California alone, 1,243,000 people were listed as  work part-time involuntarily, according to the stae Employment Development Department.

Economists at the Institute were divided on when the job market might improve.

Lawrence Mishel thinks unemployment will peak next spring, six months before the next U.S. elections, when politicians’ thoughts will turn to making their constituents happy.

Colleague Heidi Shierholz is less optimistic based on how long it took for jobs to start growing again after previous recessions.  She noted it took 15 months for jobs to come back after the downturn in the early 1990s and 18 months for the recession that began in 2001.

She said this recession has to end before a turnaround in jobs will start.  Many economists believe the recession will end in the third quarter of this year.

“Once the recession is over, then the clock starts ticking on the next year and a half (before you get job growth),” Shierholz said.

Because of the rapid and steep loss of jobs in this recession, she said it is inevitable unemployment nationwide will top 10%.  The only question is whether it will exceed the 10.8% recorded in 1983, which was the highest since the Great Depression, she said.

The June U.S. unemployment numbers will be released Thursday, July 2.

Read the institute’s full report HERE.

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Orange County was fifth among 32 U.S. metropolitan divisions in total job losses from May 2008 to May 2009, reports the U.S. Bureau of Labor Statistics.

The county lost 71,100 jobs over those 12 months, third highest for Orange County in the last 19 years. (The highest was 73,600 in February and April of this year.) Still Orange County’s May numbers were less than half of the positions that disappeared in the Chicago area, which ranked first in losses with 185,900.

Source: U.S. Bureau of Labor Statistics

Orange County also dropped a notch in terms of percentage job loss over the last year.  It ranked sixth with a 4.9% reduction in nonfarm payroll employment.

Among 310 metropolitan areas for which nonfarm payroll statistics for May were available, 295 recorded over-the-year declines in employment and 15 reported increases.

Orange County’s unemployment rate rose to 8.6% in May, the highest on record dating back to 1990. A year ago in May, local unemployment was 4.7%.

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(Update: Former John Laing Homes workers say the offices were closed June 5 and the last of the employees were laid off as of that date.)

John Laing Homes in Pacifica San Juan

John Laing Homes in Irvine will lay off another 87 people by July 31 according to a filing with the state Employment Development Department.

The latest cuts bring total layoffs at the company to 201.  The builder cut 114 jobs in January and February.

Dubai-based developer Emaar Properties bought John Laing Homes three years ago for $1.05 billion in what turned out to be the top of the market.

Faced with $977 million in debt and declining home sales, the builder filed for Chapter 11 bankruptcy reorganization in February. Earlier this month it converted to a Chapter 7 bankruptcy liquidation.

John Laing Homes isn’t the only local homebuilder to cut jobs during this recession.  In May, Standard Pacific Homes in Irvine confirmed about 50 layoffs .

See the Register’s 2009 Orange County layoff list HERE.

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