Job Tracker: California’s Latest Jobs Picture Turns Fuzzy


By Dr. Lynn Reaser

California posted a mixed jobs picture in April. The jobless rate fell to 4.8%, the lowest level in more than 16 years (since February 2001). (See Figure 1) At the same time, the state’s employers outside of farming lost more than 16,000 jobs (16,300).

Is the state’s jobs market healthy or not? The drop in the unemployment clearly shows a tightening in the labor market and a move toward full employment.

The jobs report is less clear. Although company payrolls, which are generally the more reliable barometer of the jobs picture, showed the 16,300 job loss, the separate survey of households indicates that there was an increase of about 28,000(27,800) jobs last month. The two jobs reports usually move in the same direction, but not always.

The payroll job loss was the first recorded since last June. Regionally, Los Angeles, Orange County, and Silicon Valley (Santa Clara County or the San Jose metropolitan area) contributed the bulk of the overall job loss. Some of the reductions, such as in education and accounting, may have reflected difficulties in totally correcting for seasonal declines. The motion picture industry registered a large reduction, but this industry tends to show significant monthly fluctuations. Temporary help agencies posted a large decline, which may reflect a move of firms to hiring full-time individuals, although those positions were not reflected in this report.

After outperforming the nation for 61 consecutive months in terms of year-over-year job growth, California fell slightly behind the U.S. in April. The state’s nonfarm employment grew by just 1.4% on a year-over-year basis, versus a national 1.6% gain. A total of 17 of California’s metropolitan areas outperformed the nation versus only 12 that underperformed. The outperformers included some large regions, such as the Inland Empire (Riverside and San Bernardino Counties), as well as San Francisco and Oakland. However, Los Angeles, the state’s largest metropolitan area, underperformed, along with other large areas, including Orange County, San Diego, San Jose, and Sacramento. As a result, the underformance of the 12 regions outweighed the outperformance of the others. (See Figure 2)

The latest Job Tracker map, which shows the geographic dispersion of the state’s recovery from the “Great Recession,” produced some good news. (See Figure 3) Redding joined the “recovery club,” with the area joining others that have now returned to their pre-recession peaks. That leaves only the Hanford-Corcoran metropolitan statistical area (MSA) as the only area that has not fully recovered. This area has the potential of also fully recovering by the end of this year.

On balance, April’s jobs report for California presents a “yellow flag.” It is likely to have just been a temporary pause in payroll job gains, but developments over the next two months will be important to monitor carefully.

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.