Career & Workplace
California sees unexpected job growth in most recent numbers; Unemployment rate remains steady
August 16, 2019 — News Release — Nonfarm employment in California expanded at a modest pace, increasing by 19,600 jobs in the latest numbers from the California Employment Development Department, according an analysis released jointly by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development. This level of growth falls below the monthly average over the last twelve months, which comes in at 26,000. In addition, last month’s (June) much more robust growth of 46,200 was revised down to 41,300 in the latest release.
From a year-over-year perspective, California has added 311,800 as of July 2019. This is equivalent to a 1.8% year-over-year increase, which is the fastest yearly growth rate out of any month in 2019 and a better showing than the nation’s 1.5% rate of jobs growth.
California’s unemployment rate remains near historic lows, dipping to 4.1% in July. Still, the state’s dwindling labor force growth is a cause for concern. The state’s labor force declined by 35,000 in July, the fifth consecutive monthly decrease, leaving the state’s labor force virtually unchanged from July of last year. However, the state’s faster growing regions are continuing to attract workers.
“Despite worries about the inversion of the yield curve, the real economy, as represented by the labor market and job growth, continues to advance throughout the state and its regions,” said Robert Kleinhenz Executive Director of Research at Beacon Economics and the UCR Center for Forecasting.
Key Findings:
- Health Care led the way in monthly job gains in July, increasing payrolls by 11,200 positions. This industry has posted consistent gains over the last year, which has helped push year-over-year growth in the sector to a solid 3.2%. Professional, Scientific, and Technical Services also had strong month, boosting payrolls by 7,700 positions. Year-over-year gains for Professional, Scientific, and Technical Services now stand at a robust 3.6%.
- Other sectors posting strong gains in July were Administrative Support (+6,000), Finance and Insurance (+2,100), Real Estate Rental and Leasing (+2,000), and Transportation, Warehousing & Utilities (+2,000). In percentage terms, Construction (4.3%) led the pack from July 2018 to July 2019, followed by Professional, Scientific and Technical Services (+3.6%), Health Care (3.2%), and Information (+2.8%).
- Despite the overall growth in the state, a handful of sectors shed positions in July. Leisure and Hospitality experienced the largest decline, decreasing payrolls by 9,200. Other sectors posting sizeable declines last month were Government (-3,200), Information (-2,500), Management (-800), and Construction (-800). In percentage terms, Mining and Logging declined 0.9% from July 2018 to July 2019, marking the largest decrease, followed by Retail Trade (-0.7%), Finance and Insurance (-0.1%) and Wholesale Trade (-0.1%).
- Regionally, ob growth was led by Southern California. The Inland Empire captured the top spot, boosting payrolls by 9,500 positions from June to July. That was followed by the Orange County (+4,300), Los Angeles (MD) (+2,600), and San Diego (+2,400). From a year-over-year perspective, the Inland Empire (+2.4%) has experienced the fastest rate of growth, followed by the San Diego (+1.9%), Orange County (+1.6%), and Los Angeles (MD) (1.3%).
- In the San Francisco Bay Area, San Jose led the pack increasing payrolls by 4,900 jobs over the month. That was followed by Napa (+400), San Francisco (MD) (+300), San Rafael (+200), and the East Bay (+100). From a year-over-year perspective, San Francisco (MD) (+3.6%) grew the fastest, followed by San Jose (+3.0%), San Rafael (MD) (+2.9%), Napa (+1.9%), and the East Bay (1.8%).
- In the Central Valley, Sacramento topped the list, increasing payrolls by 3,600 positions from June to July. That was followed by Merced (+1,000), Modesto (+600), Fresno (+400), and Chico (+400). From a year-over-year perspective, Fresno (+3.4%) was the fastest growing, followed by Visalia (+2.6%), Bakersfield (+2.6%), Hanford (+2.5%), Merced (+2.3%), and Yuba (+2.3%).
- On the Central Coast, San Luis Obispo led the way, boosting payrolls by 800 jobs over the month. That was followed by Santa Barbara (+700) and Salinas (+200). From a year-over-year perspective, Salinas (+3.7%) added jobs at the fastest rate, followed by Santa Barbara (+3.3%), Santa Cruz (+2.1%), and San Luis Obispo (+2.1%).
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.