RIDING HIGH! UNEMPLOYMENT AT LOWEST YEAR-END LEVEL SINCE 1969 STATE'S PEACETIME ECONOMY STRONGEST SINCE WORLD WAR II.

Byline: Chris Sieroty Staff Writer

California's economy started the millennium on a high note with the state's unemployment rate in December sinking to its lowest level in three decades, the state said Friday.

Statewide the jobless rate fell to 4.9 percent, a full percentage point under December 1998, said the report from the California Employment Development Department.

For all of 1999, the average unemployment rate dropped to 5.3 percent from 5.9 percent a year earlier.

And there are no immediate signs that this kind of performance will come untracked.

``What you are seeing is a lot of momentum left in the California economy,'' said Jack Kyser, chief economist with the Los Angeles Economic Development Corp. ``Despite the cutbacks in manufacturing, including aerospace, it's still a pretty solid report.''

The December 1999 rate was the lowest since December 1969, when unemployment dipped to 4.4 percent in an economy fueled by the Vietnam War.

As is typically the case, though, California continued to trail the nation as a whole despite a hiring surge in the booming high-technology sector. The U.S. jobless rate fell to 4.1 percent during December, and averaged 4.2 percent for the year.

Nevertheless, the monthly report illustrates the breadth and strength of California's recovery since falling into recession after the close of the Cold War during the early 1990s.

There simply is a lot going on here now, so anyone who wants a job should be able to find one, analysts said.

``California is a very diverse economy, so the growth tends to be much more broadly based than in smaller economies,'' said Bruce Smith, an economist with the state Department of Finance.

Gov. Gray Davis, speaking at a United Parcel Service distribution center in downtown Los Angeles on Friday, proclaimed that the state is experiencing its strongest peacetime economy since the end of World War II.

``The economy is surging, people are working, and California is back on track,'' the governor said.

Los Angeles County turned in a strong performance, too.

The seasonally adjusted unemployment rate in the county during December was 5.7 percent vs. a revised 5.8 percent in November and 6.8 percent in December 1998, the state said.

Countywide, the number of jobs grew by 25,000 in December as the civilian labor force grew by 22,000.

The trade sector drove the growth, gaining 10,800 jobs. About 9,400 jobs were in retail trade, typical for this time of year because of the holiday season, the state said.

Partly offsetting the gains were losses of 8,100 jobs in the motion picture sector and 1,500 jobs in manufacturing.

Statewide, the economy created 402,000 jobs in 1999, one-seventh of all the jobs created in the nation. In December alone, about 64,000 jobs were created in the state.

At year's end, a record 14.2 million people were employed in California, a figure based on the department's survey of employer payroll statistics.

Much of the growth can be attributed to high-tech industries that have created new jobs and wealth, especially in the San Francisco Bay Area.

In fact, some communities are considered to be at full employment.

The nonseasonally adjusted December jobless rate in the Bay Area counties of San Mateo and Marin stood at 1.4 percent, the state's lowest.

Orange County had a 2.1 percent rate, San Diego County was 2.5 percent and San Francisco County 2.3 percent, levels some economists once believed were unattainable.

``The low employment numbers in Orange County, San Diego and San Francisco also show that a lot of urban areas are at full employment,'' said Kyser.

In Ventura County, the unemployment rate was 4.3 percent in December. Total employment rose by 2,800 last month to stand at 280,500, the state said.

Nonfarm employment in Ventura County increased by 2,400 jobs over the month, and farm payrolls added 400 jobs. Trade increased by 1,900, with retail trades up 1,800 over November employment levels, as hiring picked up for the holiday shopping season.

While the report is decidedly upbeat, economist Kyser said some problems could surface later on.

``It still looks good, but there are some storm clouds out on the horizon, including shortages of labor and industrial space,'' he said.

Smith agreed, saying ultimately this economic expansion should end.

But he's not forecasting gloom, either.

``We at the Department of Finance do not have a recession in our forecast. Not to say that one can't occur; we just can't see the end of this (expansion).''