Career & Workplace

CALIFORNIA EMPLOYMENT SEES WEAKER GAINS IN FIRST MONTH OF 2019; ANNUAL REVISION SHOW MOST STATE INDUSTRIES REMAIN ON TRACK Unemployment Inches Up As Labor Force Continues Growth

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March 11, 2019—LOS ANGELES, CALIFORNIA—Today’s release from Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development includes analysis and commentary on both the January employment numbers and the annual benchmark revision from the California Employment Development Department (EDD).

 

January Numbers
California began 2019 with a weaker than normal monthly gain in January, increasing payrolls by 3,000 in the latest numbers from the California EDD. The yearly pace of growth slowed as well, with the state adding 246,400 jobs from January 2018 to January 2019, an increase of 1.4%. This represents a slightly slower rate of growth than in December 2018 when jobs increased by a revised 1.6% year-over-year, and is behind the national growth rate of 1.9% year-over-year as of January.
California’s unemployment rate inched up to 4.2% in January, a 0.1 percentage point increase from December. However, the driving force behind this increase was an uptick in the state’s labor force, which grew by 50,200 during the month. In yearly terms, the labor force grew by 1.5%, continuing an accelerating trend that began in mid-2018.
”California began 2019 much as it ended 2018, with the unemployment rate in record low territory and industry job gains that have been led by health care, professional and business services, and leisure and hospitality,” said  Robert Kleinhenz  Executive Director of Research at Beacon Economics and the UCR Center for Forecasting. “Looking through the rest of the year, signs point toward continued growth at the state level, with most of California’s regions remaining on track as compared to last year.”

 

Key Findings:
  • Health Care was responsible for the most job gains this month, adding 5,600 positions during  January. This sector has exhibited steady gains for some time, with a year-over-year increase of 2.4% or 56,000 positions.
  • Administrative Services followed Health Care with an increase of 2,800 jobs in January. With these gains, year-over-year growth for the sector reached 2.7%, well above the statewide average of 1.4%. Other sectors having a strong month were, Government (+2,400 positions), Professional, Scientific & Technical Services (+1,700 positions), and Information (+1,400 positions).
  • Despite steady gains for the state overall, a number of sectors shed positions in December. Declines were strongest in Retail Trade, which shed 5,500 positions. Other sectors that lost positions during the month were Education (-3,000 positions), Finance and Insurance (-1,600 positions), Wholesale Trade (-1,400 positions), along with Other Services, Construction, Logistics, and Management of Enterprises.
  • While growth was spread across the state in January, it was strongest in the San Francisco Bay Area. San Jose added the most positions both statewide and in the Bay Area in the latest numbers, increasing payrolls by 5,100. This was followed by San Francisco (MD) (+3,900), the East Bay (+1,200), Santa Rosa (+400), and Vallejo (+200). From a year-over-year perspective, growth has been the fastest in San Francisco (MD) (3.8%), followed by San Jose (2.4%), Napa (1.5%), the East Bay (1.3%), Santa Rosa (1.1%), and Vallejo (0.5%).
  • In Southern California, Orange County added the most positions in January with a gain of 4,200 jobs. San Diego followed with an increase of 100 jobs. The remaining metro areas lost jobs, with Los Angeles shedding 2,600 positions, Riverside down by 2,100 jobs, and Oxnard losing 400 positions. From a year-over-year perspective, growth was fastest in the Inland Empire (1.7%), followed by San Diego (1.5%), El Centro (1.2%), Orange County (1.0%), Ventura County (0.8%), and Los Angeles (0.7%).
  • In the Central Valley, Sacramento added the most positions in January, increasing payrolls by 900 jobs. Growth in Sacramento was followed by Merced (+700), Fresno (+600), and Bakersfield (+400). From a year-over-year perspective, growth has been the fastest in Fresno (3.2%), Sacramento (2.7%), Bakersfield (2.3%), and Madera (2.1%).
  • Along the Central Coast, Santa Barbara added the most positions in January, increasing payrolls by 800 jobs. This was followed by Santa Cruz where payrolls increased by 700 positions during the month, and Salinas (+500). From a year-over-year perspective, growth has been strongest in Salinas (2.8%) and Santa Barbara (2.8%), followed by Santa Cruz (1.1%), and San Luis Obispo (0.8%).
Annual Benchmark Revision
The annual benchmark revision from the California EDD did not change top-level growth. From 2017 to 2018, year-over-year growth averaged 2.0% before and after the revisions. However, there were more payroll positions in 2017 and 2018 than previously estimated, with average monthly employment levels 53,600 higher in the revised figures.

At the industry level, the benchmark revision was mixed, with some sectors seeing growth rates rise and others seeing their growth rates revised downward. The largest increases in year-over-year growth rates from 2017 to 2018 occurred in Mining and Logging (0.3% original to 3.9% revised), Management (0.6% original to 3.2% revised), Other Services (-0.2% original to 1.3% revised), Logistics (3.7% original to 4.9% revised), Real Estate (1.5% original to 2.4% revised), and Manufacturing (0.5% original to 1.2% revised).

The largest declines in year-over-year growth rates from 2017 to 2018 were in Leisure and Hospitality (2.7% original to 1.7% revised), Retail Trade (0.5% original to -0.1% revised), Finance and Insurance (0.1% original to -0.4% revised), Government (1.2% original to 0.9% revised), and Educational Services (3.5% original to 3.1% revised).

The EDD’s annual benchmark revision was also mixed at the metro level, with some areas seeing significant gains in their growth rates and others experiencing declines compared to earlier estimates. The largest increases in year-over-year growth rates from 2017 to 2018 were in Hanford (0.8% original to 3.0% revised), Napa (0.3% original to 2.3% revised), Sacramento (1.8% original to 3.1% revised), San Francisco (MD) (1.9% original to 3.1% revised), and Orange County (1.0% original to 1.9% revised).

The largest declines in year-over-year growth rates from 2017 to 2018 were in Merced (3.9% original to 1.4% revised), Santa Cruz (2.5% original to 0.6% revised), Visalia (2.4% original to 0.9% revised), San Jose (3.3% original to 1.9% revised), and San Rafael (MD) (1.9% original to 0.8% revised).

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