Normal seasonal employment patterns are expected to push unemployment claims lower in the months ahead, a trend that could be reinforced by a continuation of the recent job growth in the Valley, said Daniel Blake, director of CSUN's San Fernando Valley Economic Research Center.

"The report highlights two of the main issues facing the Valley--jobs and housing," Blake said. "The Valley's 2 percent overall job growth is particularly impressive when you consider that last year was a recession year, the events of Sept. 11 happened, and the Valley's very important job generator--the entertainment industry--shed 8,800 jobs in the area. In spite of all that, the Valley's private sector added nearly 13,000 jobs last year. Still the unemployment numbers are very high levels, and smart economic development policies that promote job growth would help address the current high unemployment numbers."

More troubling though, Blake said, was the state of housing in the Valley.

"The housing crunch is alive and well in the Valley," he said. "Growing housing demand has outstripped supply and resulted in rapidly rising prices and rents. Policies and actions that promote a responsive housing supply would stabilize prices and rents, and would help avoid a future housing bubble."

The center released its annual report on the state of the San Fernando Valley economy this morning at the 14th annual Business Forecast Conference of the Valley Industry and Commerce Association (VICA).

According to the report, the recession pushed unemployment claims to eight-year highs in the first two quarters of 2002 not only in the Valley, but in Los Angeles County and the rest of California as well.

The steep rise of monthly claims beyond the normal seasonal variation began in early 2001, corresponding to the onset of the national recession. After reaching a seasonal peak in July 2001, unemployment claims began to fall as they usually do in the second half of the year. But the Sept. 11 attacks and subsequent layoffs drove unemployment insurance claims back up in October and November of 2001.

While it is common for unemployment insurance claims to climb in the first two quarters, the current 7.5 percent rate of increase per month over the two quarters is roughly twice the normal rate.

The annual average of unemployment insurance claims rose 25 percent in 2001 relative to 2000, and for the first half of 2002, unemployment claims are 39 percent above the average for 2001. The last two quarters of 2001 show unemployment claim levels consistent with an average of just more than 20,000 per month.

The first quarter of 2002 shows unemployment insurance claims consistent with an average of just more than 22,500 for the year, and the second quarter of 2002 is consistent with an annual average of just more than 28,400 monthly claims.

Blake said the worsening unemployment claims pictured over the last four quarters does not necessarily mean the Valley is still in the grip of a recession. In business cycles, unemployment increases tend to lag behind other indicators of economic activity. Consequently, unemployment could still be rising while an economic recovery has started. As economic activity begins to pick up, increases in work load are first noticed by already employed people just getting busier, then by part-timers working more hours or full-time employees getting overtime.

However, if the recovery is mild rather than fast-paced, the significant job growth may be slow in coming, and this means that labor demand growth--jobs-- may not be keeping pace with labor supply growth--workers--and therefore cause increased unemployment, Blake said.

A sign of the Valley's economic recovery may be found in the resumption of the area's job growth, which resumed last year after a virtual hiatus in 2000, Blake said.

Valley private-sector employment grew at a 1.9 percent rate in 2001 compared to a 0.2 percent rate in 2000. Valley private-sector payroll grew by a fairly healthy 5.7 percent in 2001, compared to 4.7 percent in 2000.

In addition, the Valley's private sector added 12,764 jobs in 2001, growing from an average of 656,678 jobs in 2000 to 669,442 jobs last year.

Among the other findings in the report are:

The median price for resale homes in the Valley hit $320,000 in June, compared to a median price of $279,000 for all of Los Angeles County. Median home price -- the price at which 50 percent of the homes sell for more and 50 percent sell for less -- in the six-city Valley has been climbing dramatically since early 1998.

The Valley's average price of homes and condominiums rose by more than 20 percent during the last year. The average price reached a level over $355,000 in June 2002, compared to just over $295,000 in June 2001.

Vacancy: The Valley's industrial vacancy rate rose throughout 2001 and into the first quarter of 2002, reaching a 5.5 percent vacancy rate before falling back to 5 percent in the second quarter of 2002.

Office vacancy rates are up in the 13 percent range after falling as low as 9 percent in 2000. The higher vacancy rates are associated with the recession of 2001 and the continuing soft economy. However, the Valley's apartment vacancy rates, averaging 2.8 percent in the second quarter of 2002, continue to be substantially below normal levels in spite of the recession. Vacancy rates, pushed up by the Northridge earthquake in 1994 and the recession of the early to mid-1990s, have declined dramatically over the last six years. The Valley apartment vacancy rate has fallen faster and farther than that of the city of Los Angeles, which is nearly a percentage point above the Valley's.

Traffic: The 101 Freeway at the 405 tops the charts as the busiest freeway segment in the Valley, in terms of peak load, at 22,100 vehicles per hour, and annual daily traffic, at 328,000 vehicles per day. Growth in both peak load and average volume grew the most where it could, largely in the north and east Valley areas.

Airports: Burbank Airport served 4.5 million revenue-paying passengers in 2001, down from 4.75 million in 2000. This 5 percent drop is related to the Sept. 11 terrorist attacks. The attacks are also tied to a drop in annual mail shipments in and out of Burbank, which fell sharply from 8.4 million pounds in 2000 to 3.8 million in 2001. Van Nuys Airport has experienced strong growth in aircraft operations over the last 15 years. Operations have increased from below 375,000 in 1987 to 528,000 in 1999 before falling back to 483,000 in 2000 and to 464,000 in 2001.

Biotechnology: Employment in the Valley's biotech industry grew at 3 percent in 2001, which is more than 50 percent above the Valley's average employment growth of 1.9 percent. Biotech payroll grew almost 20 percent in the Valley.

Entertainment: The entertainment industry in the Valley decreased by 8.3 percent in 2001, but industry payroll rose by 2.9 percent in spite of declines in jobs. Entertainment employment fell by 8,800 to just over 96,000, but at 14.4 percent of the Valley's private sector employment it continued to be a major contributor to the area's economy.