California Job Tracker — April
By Dr. Lynn Reaser, Ph.D., CBE
JOB GAINS CONTINUE
California’s jobs market remains healthy according to the most recent data. The state’s non-farm employers added more jobs again in February and the state’s unemployment rate fell to another record low.
Non-farm payrolls advanced by 14,000 from January. While slower than the large jump of nearly 49,000 in the prior month, gains were widespread across industries. Firms in construction, manufacturing, health care, business or professional services, and tourism all added to their payrolls. The only primary sectors posting losses were government and trade, transportation, and utilities.
California reached the six-year mark in February in terms of the state’s outperformance relative to the nation in year-over-year job growth. The state’s gain was 2.3% versus a national rise of 1.6%. At 4.3%, California’s jobless rate has also now almost converged to the national 4.1% level.
The strong performance of the state’s job market looking at the first two months of this year together suggests that the Tax Cuts and Jobs Act passed at the end of last year could be helping to boost the economy or sustain last year’s strong expansion. Strong growth overseas is also a major growth driver.
JOB TRACKER 2.0
At the beginning of this year we introduced Job Tracker 2.0, which has three major components
+ The California Heat Map shows which areas are gaining jobs (green), reporting no change (yellow), or losing jobs (red). It is intended to present a snapshot of the current health of California’s economy on the basis of its metropolitan statistical areas (MSAs).
+ The Regional Job Growth Tracker depicts the job performance over time of California’s major regions (Bay Area, Southern California, Central Valley, and the Central Coast). Its purpose is to call attention to differences that may be developing across California and to show which areas might be accelerating or decelerating.
+ The Jobs Dispersion Index shows the net percentage of MSAs in any month that are experiencing increases as opposed to declines in employment. A number of 100 would indicate that all 29 MSAs are recording growth, whereas a 0 reading would reflect job losses in all of California’s regions. A Jobs Dispersion Index score of 50 would indicate that equal numbers of MSAs are reporting increases and decreases in jobs or all are unchanged. The Jobs Dispersion Index is designed to illustrate swings that might be occurring in large numbers of individual regions across the state.
February’s Heat Map (Figure 1) shows that none of California’s 29 MSAs was in the red, having achieved positive job growth over the prior three months. While several areas, scattered throughout the state were flat (yellow), the vast majority posted increases. This map shows that the job growth taking place in California is not only widespread across sectors but also across geographies.
The Regional Growth Tracker (Figure 2) indicates that many of the state’s major aggregated regions decelerated somewhat in the last three months versus the prior three. Southern California was the exception, as its growth rate held steady at 0.4%. The Central Coast, which has recently displayed the greatest volatility, decelerated from a 0.7% gain in the prior month to 0.3% in February. The Bay Area and the Central Valley also experienced moderations, but both regions registered solid advances during the month.
The Jobs Dispersion Index (Figure 3) dropped to 65.5 in February from the lofty levels of the prior two months. With any number above 50 indicating more of the state’s MSAs experiencing job gains rather than losses, February’s Index level remained in clear positive territory.
The importance of export markets for many of California’s industries, ranging from agriculture to technology and entertainment, underscores the risk of rising trade tensions between China and the United States. Hopefully, negotiations in coming months will prevent the damage that a trade war would inflict. The jobs report shows that California’s economy remains strong and is outperforming the rest of the nation. The approach to full employment also bodes well for additional wage gains for many of the state’s workers.
Lynn Reaser is chair of the treasurer’s Council of Economic Advisors and chief economist at the Fermanian Business and Economic Institute for Point Loma Nazarene University. The opinions in this article are presented in the spirit of spurring discussion and reflect those of the author and not necessarily the treasurer, his office or the State of California. Job data used in this article is compiled by the Fermanian Business and Economic Institute for Point Loma and is not meant to be used as an official State of California source or replace official information released by the State of California and/or State Department of Finance.