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California on track for longest job expansion in recorded history

 

economic-straight-talk
  • California added 19,400 jobs in May bringing theunemployment rate down to 4.2 percent, according to the latestreport from the state Employment Development Department. The lowestunemployment rate, 4.1 percent, was seen in second half of 2018.
  • Current job growth is at a 111-month expansion —the second-longest since 113-month expansion of 1960s.
  • With 282,700 jobs added over the last year, the1.6 percent pace of employment growth lines up with the growth rate nationally.Still, California’s 19,400 jobs gain accounted for a lion’s share of nationalmonthly job growth, contributing 26 percent.
  • While the state’s unemployment rate declinedslightly in May, the driver is unfortunately declining labor force whichdeclined by 49,800 in May, following a 51,800 decline in April. On an annualbasis, labor force showed only a small improvement of 136,400 or 0.7 percentgrowth.
  • In May, 7 out of 11 industries added jobs, withlargest gain in construction (12,800), suggesting increase in new homeconstruction. The second largest gain was in leisure and hospitality, up 4,500jobs, and government, up 1,800 jobs. In annual comparison, there is arelatively consistent growth in education health services followed byprofessional and business services, and a loss in financial services.
  • Regionally, Los Angeles continued with thelargest job gains adding 8,200 between April and May, with gains largely inleisure and hospitality, a seasonal gain that also reflects the strength of thearea’s tourism industry. Employment services reflected another large gain, up4,600 jobs. Within construction’s gains, the largest relative increase wasamong building finishing contractors, up 4 percent over the month, and 15.2percent over the year. Information sectors, mostly driven by motion picture andsound recording, showed the largest monthly declines, while finance andinsurance have seen the largest overall annual declines, down 3,400 jobs intotal year-over-year. The region’s employment growth over the year remainsfocused in health care and social assistance, which account for about 30percent of the growth.
  • In the Bay Area, gains were broad based acrossthe regions, and most regions saw the unemployment rate decline again fallingbelow the year-ago bottom. In San Francisco-San Mateo region, up 7,100 jobs, monthlygains were led by accommodation and food services, construction, and financialservices, with a loss in private education and health services. Over the year,the region gained 44,900 jobs.
  • In Santa Clara-San Benito region, up 4,900 jobs,gains were also led by leisure and hospitality as summer seasonal hiring kickedin. The region also saw strong gains in information and professional services.Over the year, job gains in information and computer and electronic productmanufacturing suggests the area continues to be a big draw for tech innovation.
  • Alameda and Contra Costa counties added 6,100jobs in April, with construction’s specialty trade contractors leading thegain. Over the year, the area added 19,100 jobs with over a third in healthcare and social assistance, followed by a similar gain in professional andbusiness services
  • In Marin, Napa and Sonoma counties, unemploymentrate also declined dropping to lowest rates since May 2018. However, fallingunemployment rates are due to declining labor force which was down 0.6 percentin Sonoma year-over-year, down 1.2 percent in Napa, and mostly flat inMarin.
  • Figure 1 summarizes annual changes inemployment, number of jobs added in high-income sectors, and the share of totaljobs that were high income jobs by region.
  • Column titled Percent in High Income Sectorsillustrates how many of the jobs added in each region were in high incomesectors, which include financial activities, professional and businessservices, and information sector. In San Francisco and San Jose metropolitanareas, about 50 percent of job growth is in high-income sectors which contrastnotably other regions, particularly Los Angeles where the diverse economy stillhasn’t gained traction with higher-income employment growth.

Figure 1

Notes:

East Bay Area includes Alameda and Contra Costa counties

Los Angeles includes Los Angeles County

San Francisco incudes San Francisco, Marin, and San Mateo counties

San Jose includes Santa Clara and San Benito counties