By Dr. Lynn Reaser, Ph.D., CBE
California Jobs Surge Ahead in September
California’s job market bounced higher in September, as the state’s employers added more than 52,000 workers to their payrolls. Reports from the third quarter indicate that the state has regained momentum after stalling somewhat earlier in the year.
Job gains over the past three months have averaged 43,000 per month. In contrast during the first half of 2017, payroll increases averaged fewer than 11,000 per month. (See Figure 1.)
Government payrolls, particularly education, accounted for the bulk of September’s job increase. (See Figure 2.) Only three areas lost jobs during the month: mining and logging, manufacturing, and professional and business services. The loss of technical services is one of particular concern since it had been a source of earlier strength.
California’s jobless rate held at 5.1% in September, unchanged from August. The state’s job market was strong enough to absorb a large number of people entering or returning to the labor market. This is a good sign of optimism on the part of potential job seekers.
Three for Three
Job gains were widely dispersed geographically in September. Los Angeles County led the advance with a jump of nearly 17,000 new positions. Silicon Valley (the San Jose metropolitan area) saw its payrolls slip for the second month in a row. Along with the drop in professional and technical services, this trend needs to be closely watched. On the clearly favorable side, for the third consecutive month, all 29 of the state’s major metropolitan areas (MSAs) remained above their pre-recession highs. The ability of the state to finally achieve and sustain a full recovery in the job market is encouraging. (See figure 3.)
California entered the fourth quarter on a generally strong footing. Housing costs appear to be pushing some technology jobs out of the state and the recent fires in Northern California took a serious toll on many. However, the state’s industries are benefiting from stronger markets abroad and a softer dollar as well as solid trends in consumer and business spending nationwide. Holiday sales should be favorable based on job and wage gains. Looking ahead to 2018, tax reform will be the major source of uncertainty for the nation and particularly for California.
See raw data: Employment numbers by region.
Source: FBEI, EDD
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.