California Job Tracker — December
By Dr. Lynn Reaser, Ph.D., CBE
Another Strong Employment Report
California began the fourth quarter on a solid note as its non-farm employers added 31,700 workers to their payrolls in October. This followed a surge of more than 50,000 in September. The state’s economy had slowed in the first half but has gained significant momentum since midyear. It is benefiting from a simultaneous expansion among countries around the world along with rising consumer and business spending in the rest of the country.
The state also saw its jobless rate fall back to 4.9% in October after holding at 5.1% in the prior two months. A large number of people were optimistic enough to look for work and entered the work force, but even a larger number of jobs were created.
Job gains were widespread across California’s various industries in November. Leisure and hospitality represented the largest advance and were joined by healthcare, construction, finance, professional services, and government. The state’s key technology base saw sizable job increases in engineering, computer systems design, and scientific research. Brick-and-mortar stores registered a slightly smaller advance in November than usual but were more than offset by a large advance in transportation and warehousing to serve ecommerce traffic. After three months of gain, the information sector (encompassing publishing, motion pictures, broadcasting, and telecommunications) posted a decline.
A Regional Perspective
Regionally, 16 of the state’s 29 major metropolitan statistical areas (MSAs) recorded job gains in October. Three were unchanged and ten recorded job decreases. The Inland Empire (Riverside and San Bernardino Counties) led the increase and was joined by other large economic bases, including San Jose, San Diego, San Francisco, and Sacramento. (See Figure 1.)
The increases in some of the state’s leading technology regions were encouraging. Job losses occurred in such areas as San Luis Obispo, Napa, and Ventura County. The fires in Northern California may have adversely affected employment in Napa during October.
The geographic recovery from the “Great Recession” remains complete. For the fourth month in a row, all 29 of the state’s major metropolitan areas (MSAs) remained above their pre-recession highs. (See Figure 2.)
California appears to be ending the year with considerable momentum. As the state enters 2018, concerns have mounted regarding what impact the new tax bill will have on California. Some of the state’s higher earning households will be hurt by the new $10,000 cap on deductions for state and local taxes. The state’s economy should still benefit overall from lower business taxes and tax cuts for the majority of California’s residents. Pension funds are also seeing the positive impact of the surge in stock prices. On balance, California’s share of any tax cut gifts will be limited, but Santa will not totally bypass the state.
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.