Introducing Job Tracker 2.0
By Dr. Lynn Reaser, Ph.D., CBE
With all 29 of California’s major metropolitan statistical areas (MSAs) having surpassed their pre-recession highs, it is now time to introduce a new version of the Job Tracker. Job Tracker 2.0 has been designed to monitor the near-term growth performance of different areas of California to better understand the dynamics of changes in the state’s economy.
What Is It?
Job Tracker 2.0 has three components:
+ California Jobs Heat Map
+ Regional Job Growth Tracker
+ Jobs Dispersion Index
All three components are based on the percent change in the employment average of the most recent three months compared with the prior three months.
+ 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 a MSA basis.
+ 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.
+ The Jobs Dispersion Index shows the net percentage of MSAs in any month that are experiencing increases as opposed to declines. A number of 100 would indicate that all 29 MSAs had recorded 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 were 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.
Year-End 2017 Job Tracker 2.0 Results
The Heat Map (Figure 1) shows that the majority of California’s MSAs were in the green in December, having achieved positive job growth over the prior three months. Six regions, shown in red, posted jobs losses, with most of them in the Central Valley or Central Coast. Five areas, depicted in yellow, recorded job levels that were essentially unchanged from levels seen three months earlier.
The Regional Growth Tracker (Figure 2) concluded 2017 with the Bay Area edging out Southern California as the best performing region in terms of recent job growth. This was in sharp contrast to early in 2017 when the Bay Area was alone among all regions in actually losing jobs. Southern California experienced a significant acceleration in its growth during the second half of 2017, although its growth leveled off towards year-end. Growth rates in the Central Valley and Central Coast also leveled off towards year-end. The Regional Growth Tracker shows that while significant differences occurred during 2017 among the state’s major sub-regions, all showed substantial improvement in the latter part of the year.
The Jobs Dispersion Index (Figure 3) ended 2017 with a reading of 72. This number was not quite as strong as in October when an even larger share of MSAs reporting job gains drove the Index to 84, but it remained in solid positive territory. Any number above 50 shows that more of the state’s MSAs were exhibiting job gains as opposed to losses. The Index has been in positive territory since 2011. However, it fell to a low of 53 in March 2017 as the state’s economy braked to an abrupt slowing.
The important takeaway from Job Tracker 2.0 is the solid improvement that had a diverse geographic base in the latter part of 2017. This new tool will be monitored closely in 2018 for signs of continued strength or any weaknesses that might emerge.
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.