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Tuesday, November 19, 2019
Career & Workplace

California Job Growth, Labor Force Expands In Latest Numbers

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Unemployment Rate Falls To New Record Low; Annual Labor Force Growth Cause For Concern

October 18, 2019—LOS ANGELES, CALIFORNIA—Nonfarm employment in California expanded at a steady pace, increasing by 21,300 jobs in the latest numbers from the California Employment Development Department, according an analysis released jointly by by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development. However, this level of growth trails the state’s average monthly job gain (+26,700) over the last twelve months.

From a year-over-year perspective, California has added 320,000 jobs as of September 2019, the largest year-over-year increase for the state in 13 months. This is equivalent to a 1.9% year-over-year increase, which is a better showing than the nation’s 1.4% rate.

California’s unemployment rate dipped to 4.0% in September, representing a new record low. Still, declining labor force growth is cause for concern. After sixth consecutive months of decline, the state’s labor force expanded by 20,700 in September. From September 2018 to September 2019, California’s labor force decreased by 0.3% (-62,400). However, the state’s faster growing regions are continuing to attract workers at a healthy rate.

“While it is noteworthy that the state’s unemployment rate hit a new low this month, the new record is partly the result of the state’s job gains, but also due to a labor force has shown little or no growth since the start of the year,” said Robert Kleinhenz Executive Director of Research at Beacon Economics. “However, with yearly job gains in nearly every one of the state’s major industries, including those most affected by trade conflicts, this is a reassuring report, especially at a time when there are concerns that the economy is cooling.”

Key Findings:
  • Administrative Support led the way in monthly job gains in September, growing payrolls by 11,000 positions and accounting for more than half of the state’s monthly increase. This industry has posted solid increases over the last year, which has helped push year-over-year growth in the sector to robust 3.4%. Manufacturing also had a strong month, boosting payrolls by 4,100 positions. Year-over-year gains for Manufacturing now stand at a steady 1.0%.
  • Other sectors posting strong gains in September were Health Care (+3,200), Transportation, Warehousing, and Utilities (+1,800), and Retail Trade (+1,700). From September 2018 to September 2019, in percentage terms, Educational Services (+3.5%) and Construction (+3.5%) led the pack, followed by Administrative Support (+3.4%), Professional, Scientific and Technical Services (+3.2%), Health Care (+3.0%), Information (+2.5%), and Leisure and Hospitality (+2.3%).
  • Despite overall growth in the state, a handful of sectors decreased payrolls in September. Other Services posted the largest declines, shrinking payrolls by 2,000 and pushing year-over-year growth into negative territory. Other sectors posting sizeable declines last month were Information (-1,500), Wholesale Trade (-800), and Government (-700). In percentage terms, Retail Trade declined 0.5% from September 2018 to September 2019, the largest decrease, followed by Wholesale Trade (-0.3%) and Other Services (-0.1%).
  • Regionally, job growth was led by Southern California in the latest numbers. The Inland Empire captured the top spot, boosting payrolls by 6,300 positions in September. That was followed by San Diego (+4,900). From a year-over-year perspective, the Inland Empire (+2.3%) has experienced the fastest rate of jobs growth, followed by San Diego (+1.8%), Los Angeles (MD) (+1.1%), and Orange County (1.1%).
  • In the San Francisco Bay Area, San Francisco (MD) led the pack increasing payrolls by 1,300 jobs over the month. That was followed by San Rafael (MD) (+600), San Jose (+400), and the East Bay (+200). From a year-over-year perspective, San Francisco (MD) (+3.4%) grew the fastest, followed by San Jose (+3.1%), the East Bay (+1.9%), San Rafael (MD) (+1.5%), Napa (+1.5%), and Santa Rosa (+1.1%).
  • In the Central Valley, Sacramento topped the list, increasing payrolls by 2,100 positions in September. That was followed by Chico (+1,100), Fresno (+700), Madera (+500), and Stockton (+400). From a year-over-year perspective, Fresno (3.4%) was the fastest growing, followed by Merced (+2.9%), Madera (+2.8%), and Sacramento (+1.8%).
  • On the Central Coast, Santa Cruz led the way, boosting payrolls by 400 jobs over the month. That was followed by San Luis Obispo, where payrolls expanded by 300 positions. From a year-over-year perspective, Salinas (+3.6%) added jobs at the fastest rate, followed by Santa Barbara (+2.6%), Santa Cruz (+1.9%), and San Luis Obispo (+1.6%).
Beacon Economics is an independent economic research and consulting firm based in Los Angeles. The UCR School of Business Center for Economic Forecasting and Development is the first world class university forecasting center in the Inland Empire. This analysis was authored by Christopher Thornberg, Robert Kleinhenz, and Brian Vanderplas. Learn more at www.beaconecon.com and www.ucreconomicforecast.org.

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Inland Empire Business Journal
The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering Riverside and San Bernardino Counties.