California jobless rate climbs to 10.5 percent THE ECONOMY IN TURMOIL

Randell Haile uses the free computers at the Emploment Development Department to look for a job on Friday, March 20, 2009 in San Francisco. The state unemployment rate jumped to 10.5 percent in February, a level not seen since 1983, as employers cut 116,000 payroll jobs in an economic slide that has left 1.95 million Californians out of work. less Randell Haile uses the free computers at the Emploment Development Department to look for a job on Friday, March 20, 2009 in San Francisco. The state unemployment rate jumped to 10.5 percent in February, a ... more Photo: Eric Luse, The Chronicle Photo: Eric Luse, The Chronicle Image 1 of / 4 Caption Close California jobless rate climbs to 10.5 percent 1 / 4 Back to Gallery

The state unemployment rate jumped to 10.5 percent in February, a level not seen since 1983. All told, the recent economic slide has left 1.95 million Californians scrambling for work.

Friday's report from the Employment Development Department charts a sharp rise from January's 10.1 percent rate and brings the state closer to its modern peak of 11 percent, which occurred in late 1982 and early 1983.

The U.S. unemployment rate for February was 8.1 percent. During the Great Depression, unemployment got as high as 25 percent.

"What we're seeing now is not a depression, it's not the end of the world, it's a normal bad recession," said Chris Thornberg with San Rafael's Beacon Economics.

Stephen Levy, with Palo Alto's Center for the Continuing Study of the California Economy, compared the current situation to the long and painful 1980s recession.

"I think this will be a little bit deeper and a little bit longer than the 1982-83 recession," he said.

Back then, unemployment remained above 10 percent for a year and briefly hit 11 percent. This time Levy said unemployment probably will break 11 percent and stay there for months, until the housing market hits bottom and starts to recover, healing the state's biggest economic wound.

But there was no sign of healing in Friday's figures as employers cut 116,000 payroll jobs statewide in February.

"Usually, a very bad month for California is to lose 20,000 to 30,000 jobs," said former EDD commissioner Michael Bernick, now a San Francisco attorney.

Statewide, payroll employment has shrunk 4 percent since February 2008, with nearly 606,000 jobs vanishing.

Virtually every industry in the state has lost jobs on an annual basis, the big exception being health and education services, where payrolls have grown 1.8 percent.

But construction employment has plunged 18.5 percent in 12 months. Manufacturing is down 6.2 percent on an annual basis. Employment in professional and business services is off 4.5 percent while leisure and hospitality payrolls are down 2.8 percent.

Friday's report shows that the Bay Area continues to fare slightly better than the state. But there was considerable variation among the region's three major metropolitan areas and all three zones saw the job market deteriorate.

Metropolitan San Francisco, consisting of San Francisco, San Mateo and Marin counties, had a jobless rate of 7.8 percent in February, better than the state or the nation.

This three-county area has been less afflicted by the housing bust and buoyed by a concentration of jobs in tourism, business services, high-tech and other sectors with fewer payroll losses.

Metropolitan San Jose, made up of Santa Clara and San Benito counties, had the worst rate in the region at 10 percent.

Levy blamed San Jose's jobless rate on a jump in the size of the labor force, as more people went looking for work even as jobs were getting harder to find. The South Bay has lost thousands of jobs in business services and retail.

In the Oakland metropolitan area, made up of Alameda and Contra Costa counties, unemployment stood at 9.6 percent in February.

The two East Bay counties have been hit particularly hard by losses in construction, down 9,900 jobs since last year, and retail trade, where payrolls have shrunk by 7,100 on a year-over-year basis.