By Dr. Lynn Reaser, Ph.D., CBE
California’s Job Market Scores a Big Win
The latest jobs report delivered great news for California. For the first time, all of the state’s 29 major regions recorded numbers showing a full recovery from the “Great Recession” of 2007–09. The state also aced the jobs report with a huge gain in employment, putting it again ahead of the rest of the nation in terms of job growth.
Geographic Recovery Reaches Victory Line
California, as of midyear, was still shy by two areas of a full recovery from the Great Recession. Redding and Hanford-Corcoran, reflecting the problems facing parts of rural California, had still not recouped all of the jobs losses incurred during the downturn. In July both of these Metropolitan Statistical Areas (MSAs) joined the “recovery club.” This marks the first time that every single California MSA has reached or exceeded its pre-recession employment peak. (See Figure 1.)
Employers Ramp Up Hiring
Defying concerns that the state might be losing momentum, California’s economy accelerated in July as employers added nearly 83,000 (82,600 jobs) to their payrolls. This far exceeded the number of jobs created during the entire first half of 2017 and was the largest advance since April 2016.
Tourism, business and professional services, education, health care, government, real estate, and construction led the way in July in adding jobs. California nonfarm job growth had outpaced the nation for 61 consecutive months through March. The state slipped below the nation in April and May before pulling even with the rest of the country in June. In July California regained its lead, with a year-to-year job gain of 1.7% versus a national rise of 1.5%.
The state’s unemployment rate edged up slightly to 4.8% in July from 4.7% in the prior month. This was still down significantly from the 5.4% of a year ago.
It is important not to overreact to one month of good news. Prior to July, the state had been showing signs of slowing. Efforts to correct for seasonal swings, as the U.S. Bureau of Labor Statistics does with employment numbers, can also be difficult. Numbers for September and the rest of the year will now be especially important to determine the path of California’s underlying economy.
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.