State adds 41,200 jobs in October
The unemployment rate falls to 5.8% — its lowest level since ’07.
California employers added 41,200 net jobs in October, a significant increase from more sluggish growth reported a month earlier, according to data released Friday.
Last month’s job gains are more in line with the state’s average growth of about 38,000 jobs per month over the last year. Friday’s data also showed significant upward revisions to September’s numbers, which initially showed a tepid gain of just 8,200 jobs, sparking concern that the state’s economic expansion could be slowing.
Numbers released Friday showed the state actually posted a gain of 21,100 jobs in September.
Esmael Adibi, an economist at Chapman University, said the month-tomonth numbers have f luctuated pretty widely throughout the year. The revisions to September’s numbers, along with the strong numbers this month, are a sign that the state’s pace of job creation remains healthy.
“California is doing much stronger than the U.S.,” he said. “It’s a strong report. It’s very broad-based job creation.”
The state unemployment rate in October fell to 5.8%, down from 5.9% in September and the lowest since October 2007.
Since the Great Recession sent California’s unemployment above 12% in 2010 — higher than every state except Michigan and Nevada — its economic rebound has been swift. For the last three years, the Golden State has grown jobs at a rate faster than all but five other states.
California added jobs at a rate of 2.9% over the last year, faster than the 2% growth rate for the U.S. overall. The fastest gains over the last year have come in the construction industry, which posted a 7.3% gain since last October as the sector continues to rebound from the loss of nearly 400,000 jobs during the downturn. Professional and business services, which includes high-paying lawyers and accountants and also low-paying temporary jobs, had gains of 5.3% over the year, with the fastest growth coming from higher-end jobs.
Manufacturing was one of the worst-performing sectors in California, posting a slight loss since last October. That industry in particular has seen a slowdown as the economies of major trading partners such as Canada and Japan have begun to slow. Exports to Canada, California’s secondlargest trading partner, have declined by more than 13% over the last year, according to an analysis of trade data by Bank of the West.
Slowing in the energy sector has also led to cutbacks for manufacturers that supply equipment used in oil and gas exploration.
But experts said the small decline in manufacturing employment, despite all the external challenges, is a sign of resilience.
“It’s been lackluster, but we’re not seeing anything that would signal a downturn in the economy, or anything like a recession,” said Scott Anderson, chief economist at Bank of the West in San Francisco.
Anderson expects that California’s job growth will continue to outpace the U.S. through next year.
“It’s the mix of industries we have here,” Anderson said. “Certainly the technology sector has been leading the charge and driving growth in these other service industries. These technologies are structural changes in the way the economy functions, and California is a leader in that space.”
The state’s unemployment rate of 5.8% is down sharply from last October, when it was at 7.2%. But it’s still higher than the national unemployment rate of 5%, and higher than in all but nine other states.
Much of that has to do with the highly variable regional economies across California. Booming coastal areas such as San Francisco and Silicon Valley have had unemployment rates hovering below 4% over much of the last year, while inland regions such as El Centro have jobless rates above 20%, according to data from Beacon Economics.
While California’s job market is expected to continue growing faster than the rest of the nation, that economic expansion is not benefiting many in the state. A widening of the income gap between high and low earners has been a growing problem across the United States since the recession, but the trend is more pronounced in California.
Since 2006, median wages have declined 6.2% in California, compared with 1.9% for the U.S. overall, according to census data analyzed by the California Budget & Policy Center. For the top 10% of earners, wages have increased 4.8% in California, compared with an increase of 2.6% for the nation.
“If you are in high tech, if you work for Uber, Google, Apple, you are doing much better,” said William Yu, an economist with the UCLA Anderson Forecast. “But if you are just a traditional worker, you don’t really feel it. You don’t see your wages or income growing as fast as housing prices.”