California unemployment ticks down to 12.2 pct

SAN FRANCISCO Oct 16 (Reuters) - California's unemployment rate edged down to 12.2 percent in September from a revised 12.3 percent in August but the recession's grip on the state's economy remained firm, shaving 39,300 jobs from nonfarm payrolls between the months, state officials said on Friday.

The most populous U.S. state is suffering from economic recession, marked by a sharp decrease in consumer spending, and the collapse of house construction and home mortgage booms.

Underscoring the Golden State's hard times, California's September jobless rate was considerably higher than its year-earlier 7.8 percent and the month's the U.S. national average of 9.8 percent

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Economist Steve Levy, of the Center for the Continuing Study of the California Economy, discounted the tick down in the state's jobless rate from August and said the woes weighing on California's jobs market are far from over.

"The poor jobs report for California comes amidst reports of production and export gains throughout the economy and a sharp rise in stock prices," Levy said. "September's report emphasizes the disappointing truth that jobs are the last economic indicator to recover."

He added that California has underperformed the nation measured by job trends over the past year due to worse than average trends in the construction and government sectors."

Levy said local government and education job losses stung California last month, a reflection of lean municipal budgets, with 15,000 fewer jobs in local schools compared to a year ago and 17,000 fewer jobs in city and county government.

He said investments in public works, energy and health-care are picking up and will help bolster California's economy at some point next year.

"Still, the good news for jobs remains in our future as the September report shows clearly," Levy said.

(Reporting by Jim Christie; Editing by Andrew Hay)