California posts solid job growth in August

The unemployment rate drops to 6.1% as state employers add 36,200 positions.

California’s employers kept up their hiring run in August, adding 36,200 nonfarm payroll jobs and pushing down the unemployment rate to 6.1%.

That’s a slight drop from July’s jobless rate of 6.2%, and the lowest level since January 2008, according to the Bureau of Labor Statistics. Nationwide, the jobless rate slid to 5.1% in August, down from 5.3% the month before.

“California scored another impressive gain in jobs,” said Lynn Reaser, an economist at Point Loma Nazarene University. “Despite various head winds, especially those caused by the slowdown in China and emerging markets, California’s economy continues to show solid momentum.”

California added more jobs than any other state, including Florida, which came in second with a gain of 19,600 positions.

Since August 2014, California has gained 470,000 jobs, a 3% annual growth rate that has outpaced the national average of 2.1%. A year ago, the state unemployment rate was 7.4%.

The increase in jobs last month came after a robust showing in June, although that figure was revised down slightly to 80,500.

Gains were spread across several sectors. Government jobs showed the biggest month-over-month increase, with 31,300 added in August. Much of that is the result of an early start to the academic year at many public schools, economists said.

The leisure and hospitality sector reported 10,600 net new jobs, and the trade, transportation and utilities sector added 7,900 positions. The information sector, which includes the entertainment industry and parts of the tech industry tied to Silicon Valley, added 1,000 jobs. Education and health services gained 3,800 positions.

The construction industry, which reported only 700 more jobs, has seen the biggest growth over the last year. Compared with August 2014, the sector is up 6.5% with 43,800 additional jobs.

“The story is that except for construction, which is a big middle-wage job gainer, the job growth has been in high- and lower-wage sectors,” said Stephen Levy, director of the Center for Continuing Study of the California Economy. “The share of jobs in the middle is falling.”

Two major industries showed the most job losses: Professional and business services shed 11,200 positions, while manufacturing lost 7,100 jobs.

But Levy said the drop in professional and business services, which spans a wide array of white-collar jobs such as architects and lawyers, could actually turn out to be a good sign.

A sizable chunk of the decline, or 4,100 positions, came from temporary employment firms. Companies may be doing well enough to hire full-time help, he said, or they may have been motivated by a National Labor Relations Board ruling last month that redefined the definition of an employer and decreased the appeal of using staffing companies.

“For the Bay Area, companies like Facebook and Google have taken what were contract employees driving buses and shuttles, and now some of them have benefits and are full-time employees,” Levy said. “Companies are tired of being accused of using contractors.”

In coming months, California should continue its healthy job gains, economists said. However, further slowdowns in global economies or continued turmoil in stock markets at home may hurt the labor market.

Many regions of California experienced hiring increases.

Los Angeles County’s seasonally adjusted unemployment rate fell to 6.9% in August from 7.2% in July, according to the state Employment Development Department. Total nonfarm employment climbed 7,900, boosted in large part by the early start for public schools, which sent government payrolls up 5,700.

In San Francisco County, where a robust tech sector has spurred strong job growth, the unemployment rate fell to 3.5% from 3.7%. Imperial County, which has dealt with stubbornly high joblessness, reported a decline of 100 jobs. Its unemployment rate clocked in at 23.7%.