California Job Tracker: More Mixed News
By Lynn Reaser, Ph.D., CBE
While California recovered after April’s job loss, with the addition of 17,600 positions to employers’ payrolls in May, California’s slowdown in year-over-year job gains continued. Relative to a year ago, payrolls were up by 1.5% versus a national gain of 1.6%. After outperforming the nation for 61 consecutive months, this was the second month in a row that California fell slightly behind its counterparts in other states.
Data revisions in July could reduce the state’s latest gain as there appears to have been reporting errors. Specifically, state education employment numbers indicate an overstatement for May in the Sacramento metropolitan statistical area (MSA).
California’s jobless rate fell further in May, moving down from the prior month’s 4.8% to 4.7%. This put it at a level close to the national 4.3% average. Last month’s unemployment rate in the state was the lowest since December 2000. However, the dip from April’s 4.8% was largely due to a large drop in the number of people looking for work.
The tightening of California’s labor market means that workers are enjoying larger raises this year. So far in 2017, average hourly earnings among private firms are running 4.2% above a year ago. (See Figure 1.) That is a significant boost from last year’s average raise and is double the rate of inflation.
Almost All on Board
California remains shy by just one metropolitan area in terms of the geographic spread of the recovery from the” Great Recession” of 2007–09. Redding had joined the “recovery club” in April by reaching a job level equal or above its pre-recession peak, leaving only Hanford-Corcoran short. Those two areas swapped positions in May. Hanford-Corcoran reached its pre-recession job peak, but Redding fell back with a loss of jobs. (See Figure 2.) The state should still accomplish a full geographic recovery by year-end, although the slowdown in job growth is a cause for concern.