Employment Growth Continues At Steady Pace
California added to its nonfarm job base a steady pace in the latest numbers from the Economic Development Department (EDD), increasing by 30,700 positions, according to an analysis released jointly by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development. For four of the last five months, the state has exceeded the 24,100 average monthly gain that occurred during the first eleven months of 2018. At the same time, California’s 1.8% year-over-year increase remained just above the national growth rate of 1.7%.
The state’s unemployment rate remained at its historic low of 4.1% in November. Moreover, this came in the face of a sizeable 75,580 increase in California’s labor force during the month, building on solid gains from September and October. In percentage terms, the 0.7% increase in the labor force from November 2017 to November 2018 was the largest since the 0.8% gain in March.
California’s employment growth continues to be broad based, with high-skill and low-skill sectors boosting payrolls this month. The Leisure and Hospitality sector added the most jobs last month, increasing payrolls by 12,400. This strong growth helped push year-over-year gains to 2.6%, well above the overall statewide gain of 1.8%.
“All eyes are on the Retail Trade sector during the holiday season where job counts are little changed compared to a year ago as increases in online shopping challenge brick-and-mortar stores to demonstrate their value proposition,” said Robert Kleinhenz Executive Director of Research at Beacon Economics and the UCR Center for Forecasting. “More generally, however, California saw a welcome jump in its labor force after months of little or no improvement, a good sign for the state’s employers in the months to come.”
- The Professional, Scientific, and Technical Services sector and the Construction sector had a strong month, increasing payrolls by 7,000 and 3,300, respectively. More importantly, with this solid month, year-over-year job growth came in at 4.3% in Professional, Scientific, and Technical Services and at 3.6% in Construction, helping drive a significant portion of overall statewide job gains over the last year. Other sectors posting solid gains this month include Other Services (2,800), Government (2,700), and Logistics (2,100).
- While growth was up across the majority of industry sectors, a handful shed positions during the month. The Information sector (-4,500) shed the most jobs in November, followed by the Management sector, which shed 200 positions. However, despite this one-month decline, growth remains positive in both these industries from a year-over-year perspective with Information boosting payrolls by 1.5% and Management growing by a modest 0.2%.
- At the regional level, growth was concentrated in the Bay Area in November. The San Francisco (MD) led the way, boosting payrolls by 6,300. That was followed by San Jose (+4,200) and the East Bay (+3,700). From a year-over-year perspective, San Jose (+3.4%) has been the fastest growing, followed by Santa Rosa (+2.3%), San Rafael (+2.1%), and both the East Bay and San Francisco (MD) (+1.9%).
- Growth was modest in Southern California in November with Los Angeles (MD) (+2,200) leading the way. Los Angeles (MD) was followed by gains in San Diego (+1,500), Orange County (+1,100), and the Inland Empire (+500). From a year-over-year perspective, El Centro (+2.8%) has been growing the fastest, followed by the Inland Empire (+2.3%), San Diego (+1.8%), and Ventura (+1.6%).
- In the Central Valley, Sacramento led the way increasing payrolls by 3,100 in November. This was followed by growth in Stockton (+1,300), Modesto (+1,000), and Visalia (+500). From a year-over-year perspective, Merced (+3.7%) has been growing the fastest, followed by Chico (+3.5%), Stockton (+3.1%), and Redding (+2.7%).
- On the Central Coast, Santa Barbara led the way boosting payrolls by 400, followed by San Luis Obispo (+200) and Salinas (+200). From a year-over-year perspective, Santa Cruz (+2.0%) has been growing the fastest, followed by Salinas (+1.8%), San Luis Obispo (+1.4%), and Santa Barbara (+0.4%).
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.