California Job Tracker-June

By Dr. Lynn Reaser, Ph.D., CBE


California’s job growth cooled in May, while its jobless rate remained the lowest on record (going back to the beginning of 1976). After adding nearly 26,000 (25,600) employees to their payrolls in April, the state’s businesses and government agencies took on only another 5,500 workers in May.

Some of this more tepid performance reflects the ebbs and flows of hiring from month to month, while efforts to correct for normal seasonal swings are imperfect. Companies also are increasingly finding it difficult to fill positions with the skills they need.

Construction, wholesale trade, private education, and federal as well as local government agencies recorded sizable job declines. Tourism, professional and technical services, and retailing countered with substantial gains. Manufacturing payrolls were unchanged.

California reached a diamond jubilee in May as it outperformed the nation in terms of year-over-year job growth for the 75th consecutive month. The State recorded a year-over-year gain of 1.8% versus a national increase of 1.6%


At the beginning of this year we introduced Job Tracker 2.0, which has three major components

Ø 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).

Ø 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.

Ø 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.

May Readings

May’s Heat Map (Figure 1) shows that 20 of California’s 29 MSAs registered job gains during May, while 9 were flat. No area recorded a loss. The largest areas showing no change included Los Angeles, Orange County, and Sacramento. The large number of MSAs posting job increases were scattered throughout California.

The Regional Growth Tracker (Figure 2) shows the Bay Area and the Central Coast leading in May, with gains of 0.5% and 0.4%, respectively, over the prior three months. Southern California and the Central Valley lagged, each with gains of only 0.2%.

The Jobs Dispersion Index (Figure 3) advanced to 69.0 in May from 62.1 in April. The Index has ranged between about 69 and 71 so far this year after peaking at 86 in January. With any number above 50 indicating more of the state’s MSAs experiencing job gains rather than losses, California’s expansion continues to be widespread.


Despite the month-to-month volatility, California’s underlying upward trend remains intact. The State does face headwinds. A stronger dollar and trade retaliation could hurt exports, while higher interest rates will curb some of the demand for housing. However, consumer spending should be solid this summer, supported by tax cuts, job gains, and rising wages. Corporate spending, particularly in technology, will also expand, spurred by lower taxes and higher profits.

A primary constraint facing California and its employers in coming months will be the challenge of finding qualified workers. This could limit the State’s potential growth.

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.

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