California adds 19,400 jobs in May, a quarter of all U.S. growth

State’s gains tracking ahead of national numbers

Year-over-year, the Golden State added jobs at a 1.6% rate, the same as the nation as a whole. California’s unemployment rate was 4.2%, the same as a year earlier, but slightly above April’s 4.3% rate.

The U.S. unemployment rate held at 3.6% in May.

“California is still one of the top performing economies in the United States,” said Christopher Thornberg, the founder of Beacon Economics, a Los Angeles research firm. “For all the headlines about a potential recession and worries about the financial market and worries about trade, you don’t see this in the data.”

However, the “paltry” 0.7% growth of the state’s labor force over the last year could hamper growth going forward, he said.

That includes both people with jobs and people looking for work. Job growth has slowed in California in recent years because of the housing supply crisis, he said. “People are not moving to California because we are not building enough homes.”

California’s 19,400 job gain accounted for 26% of the nation’s total 75,000 job gain for the month, a ratio explained by the fact that the U.S. had a weak number last month. Month-to-month data, based on a small survey, are erratic.

The unemployment rate comes from a federal survey of 5,100 California households. Payroll jobs data are culled from a separate federal survey of 80,000 California businesses.

More significant, according to Lynn Reaser, an economist at San Diego’s Point Loma Nazarene University, is that California’s average job growth of 25,000 is slightly ahead of last year’s 24,000 gain for the same period. In contrast, national job growth is only about two-thirds the pace seen during the first five months of last year, in part due to a weakness in manufacturing that reflects a global slowdown.

“California’s performance reflects the strength of its technology sector, tourism, healthcare, education and pent-up demand for housing and infrastructure,” Reaser said.

California workers are also receiving larger pay hikes than their national counterparts.

“While hourly wages in the private sector have climbed somewhat over 3% nationally this year, pay hikes in California have averaged more than 5%,” she said. “Some of the greater increase in California reflects the intense competition for workers in the technology sector as well as the pressure to offset the cost of housing."