October 17,2015-
“In addition to the 8,200 Nonfarm jobs added last month, the Farm sector also added 4,400 jobs despite the drought that has persisted for several years.”
California’s unemployment rate has fallen below 6% for the first time in almost 8 years. The state’s unemployment rate dipped 0.2 percentage points in September, hitting 5.9%. The last time the percentage of unemployed workers was this low was in November 2007—prior to the official start of the ‘Great Recession’, which began in December 2007. The state also added 8,200 new jobs Nonfarm in the latest numbers.
While the overall number of employed residents increased by 11,900 in September, the state’s labor force also declined last month as 31,900 formerly unemployed workers left the workforce. Beacon Economics has some doubt about this contraction and finds that California’s labor markets continue to perform well.
“The extremely small sample size of the unemployment survey (0.04% of all households) casts doubt on the large decline in the state’s labor force, particularly in light of gains in farm and nonfarm jobs and the increase of more than 11,000 employed residents,“ said Jordan Levine, Economist and Director of Economic Research at Beacon Economics. “September’s job growth was down compared to growth in August, but represented growth nonetheless; the employment outlook for the Golden State remains very positive.”
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.
Key Points:
- In addition to the 8,200 Nonfarm jobs added last month, the Farm sector also added 4,400 jobs despite the drought that has persisted for several years. California is expected to experience heavy precipitation this winter, but the lack of rainfall to date has done little to arrest growth in the agricultural sector. This winter’s much-needed rainfall may give the Farm sector a shot in the arm for 2016, although it remains to be seen as to how much of the forecasted weather will actually materialize.
- The Job growth was spread across a variety of industries, with both high- and low-wage categories seeing an increase. Administrative Support jobs, a middle-income category which includes temporary workers, saw the largest boost with 6,800 new jobs created. The Information sector, which includes everything from Motion Pictures to Software Publishing, posted a 4,900 job increase. This sector tends to be one of the highest paying in the state, with an annual average wage of more than $152,000 as of the first quarter of 2015.
- The Arts and Entertainment, Construction, and Retail Trade sectors also posted healthy increases, adding 3,100, 2,100, and 1,500 jobs, respectively. The uptick in overall employment and wage growth that the state has been experiencing, along with housing market gains, undoubtedly helped propel these sectors forward in September as Californians spent more money and builders responded to the dwindling supply of homes available for sale or rent. Even the public sector saw solid increases, with 6,200 new positions added – driven entirely by the Local Government sector (cities, counties, and local agencies).
- Still, several sectors did see job losses last month. Manufacturing employment declined in September by a modest 200 positions. The Healthcare sector, which has been a stalwart throughout the recession and recovery, also shed 900 jobs after adding more than 17,000 in August. However, the largest losses came in the Financial Activities, Professional, Scientific, & Technical Services, and Hotel/Restaurant sectors, which shed 5,900, 5,800, and 2,200 jobs, respectively.
- Regionally, gains and losses were spread across the state. Los Angeles (+22,300), San Diego (+5,700), San Francisco (+4,100), the East Bay (+1,900), and the Inland Empire (+1,000) experienced the largest upticks. However, these gains were offset by losses in Sonoma County (-1,100), Silicon Valley (-4,100), and Orange County (-5,700). Every other metropolitan area saw gains or losses that were less than 1,000 jobs. Again, these numbers are based upon a survey and are likely to be revised. California continues to set new all-time high levels of employment and while some areas and sectors are doing better than others, the overall outlook remains positive.