Unemployment Rate Remains Steady
May 17, 2019—LOS ANGELES, CALIFORNIA—Nonfarm employment in California expanded at its fastest pace so far this year, based on 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. Nonfarm payrolls in the state grew by 46,000 in April, the largest monthly gain in over two years (since March 2017).
“The most recent April numbers make it the highest growth month so far this year for California, which led all states in monthly gains last month,” said Robert Kleinhenz Executive Director of Research at Beacon Economics and the UCR Center for Forecasting. ““That said, California’s employment growth has been slower this year compared to 2018, and has recently dipped below the job growth rate for the nation.”
Kleinhenz notes that while Southern California’s labor force growth has decelerated noticeably, continued labor force gains in the San Francisco Bay Area enabled California’s industries to maintain momentum. The forecast from Beacon Economics and the UCR Center for the remainder of 2019 and into 2020 has the state’s job growth continuing but at a slower pace than in the recent past.
From a year-over-year perspective, California added 271,600 jobs in the latest numbers. This was the equivalent to a 1.6% year-over-year increase, the fastest yearly pace so far this year, but slightly behind the 1.8% growth rate in the nation as a whole.
The unemployment rate in California has remained largely unchanged over the last year and held steady at 4.3% in April. While the state’s labor force declined by 52,200 in April, erasing much of the gain from earlier this year, on a year-over-year basis, the state’s labor force grew 1.1%, equivalent to an increase of 203,900.
- Health Care led the way in terms of April’s job gains, increasing payrolls by 15,100 or nearly one-third of the monthly gains for the entire state. The strong month of payroll gains pushed year-over-year growth in this sector to 2.9%, well above the 1.6% average in the state overall. Leisure and Hospitality also had a strong month, increasing payrolls by 12,100. Year-over-year gains for Leisure and Hospitality now stand at a healthy 2.1%.
- Other sectors posting strong gains for the month were Administrative Support (+3,600), Government (+3,500), Wholesale Trade (+2,400), and Construction (+2,400). In percentage terms, Information led all industries with a 3.5% yearly gain, followed by Professional, Scientific, and Technical Services at 3.2% and Health Care at 2.9%.
- Despite the broad-based growth in the state last month a handful of sectors saw payrolls decline in April. Retail Trade experienced the steepest decline, decreasing payrolls by 2,100. With this drop year-over-year gains for this sector remain negative, with payrolls declining by 0.5% relative to the same month last year. Finance and Insurance (-700) and Information (-600) were the only other major sectors that saw a decrease in payrolls in April.
- Regionally, growth was surprisingly concentrated in Southern California. The Los Angeles (MD) led the way, boosting payrolls by 18,300. That was followed by growth in the Inland Empire (+6,700), San Diego (+5,000), and Orange County (+4,700). From a year-over-year perspective, the Inland Empire (+1.5%) saw the fastest growth. This was followed by growth in San Diego (+1.4%) and the Los Angeles (MD) (+1.1%), with both Orange County and Ventura County at 1.0%.
- In the San Francisco Bay Area, the East Bay led the pack increasing payrolls by 3,800. This was followed by San Jose (+3,400), San Francisco (MD) (+2,000), and Santa Rosa (+1,600). From a year-over-year perspective, San Francisco (MD) (+3.6%) was the fastest growing, followed by San Rafael (MD) (+2.7%), San Jose (+2.6%), and the East Bay (1.8%).
- In the Central Valley, Sacramento led the way, increasing payrolls by 3,000. Job gains in Sacramento were followed by Fresno (+1,100), Bakersfield (+600), and Hanford (+300). From a year-over-year perspective, Fresno (+3.8%) was the fastest growing, followed by Sacramento (+2.8%), Bakersfield (+2.2%), and Madera (+2.1%).
- On the Central Coast, Salinas topped the list, boosting payrolls by 800. Payrolls also grew in Santa Cruz (+400) and San Luis Obispo (+300) last month, but fell by 100 positions in Santa Barbara. From a year-over-year perspective, Salinas (+3.2%) added jobs at the fastest rate, followed by Santa Barbara (+2.2%), Santa Cruz (+1.9%), and San Luis Obispo (+1.4%).
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.