Continuing its strong upward trend, California added another 41,900 nonfarm jobs in October. This builds on the upwardly-revised 21,100 nonfarm positions added in September. The state’s employment expansion continues to outpace the nation’s as a whole, with payrolls expanding by 2.9% in California compared to 2% in the nation overall, year-over-year.
Additionally, California’s unemployment rate fell to 5.8% in October. Part of this was due to a decline in the state’s labor force, which dropped by 11,000 in October. However, despite the work force contraction, 15,400 more state residents found work in October, suggesting that the declining unemployment rate is also being driven by improving labor market conditions.
As always, Beacon Economics cautions against reading too much into any single month’s numbers. EDD data is derived from sample-based estimates and may be revised up or down in subsequent months.
Job growth was spread across a wide-range of industries in the latest numbers, with both high- and low-wage categories experiencing increases. Leading the way was the Leisure and Hospitality sector, which increased payrolls by 18,400 positions.
The Professional, Scientific, and Technical Services sector also saw solid gains, increasing payrolls by 8,500 positions during the month. Venture Capital money continues to pour into California, which has been a boon to the state’s tech companies (housed within this sector). The Construction sector also increased payrolls significantly over the month, adding 7,600 positions. Undoubtedly, Construction was helped by continued housing market gains and an uptick in permitting across the state.
The Farm sector continued to add jobs as well, adding 7,400 positions despite difficulties related to the drought that has persisted for several years. While this winter’s rainfall is expected to be above average, it remains to be seen how much of the forecasted weather will actually materialize.
Several sectors in the state did see jobs losses in October. Employment levels in the Educational Services and Information sectors declined in October, with payrolls falling by 7,300 and 1,900 jobs, respectively. The Government sector also posted job losses, shedding a modest 700 employees from their payrolls.
Regionally, gains and losses were spread across the state. San Jose (+7,600), the Inland Empire (+7,600), San Francisco (MD) (+4,600), and the East Bay (+3,400) experienced the largest gains. Statewide, these gains were somewhat offset by losses in Los Angeles (MD) (-2,600), Hanford (-600), and Santa Rosa (-500). In percentage terms Santa Cruz (+1.6%) experienced the largest gains over the month and Hanford (-1.6%) experienced the greatest losses.