Losses of Lower-Paying Jobs Drags Down California’s Employment Growth in June

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  • The Golden State created 800 jobs (seasonally adjusted) in June, which is the lowest number since the recovery began in 2010 and follows an upward revision to 7,200 jobs added in May, according to the latest numbers from the state Employment Development Department. Nevertheless, notable losses in seven California industries dragged down the overall number of jobs added. Interestingly, industries with job losses generally employ lower-paid employees. The four industries that gained jobs added 16,200 positions, with half of them in education and health services, followed by information, government, and professional and business services. Among the seven industries that reported 15,400 job losses, the largest decreases were in leisure and hospitality; construction; trade, transportation, and utilities; and financial activities. Note that these industries have had some of the strongest job growth so far in 2018. In sum, while the overall number of jobs added appears low, the employment picture is very solid and suggests continued strong wage growth for California workers.
  • Over the year, California created 269,100 jobs, with nine industries adding a total of 272,800 positions and two industries losing a total of 3,400 jobs. The largest job gains were in educational and health services, up by 75,800 jobs; professional and business services, up by 42,200 jobs; and leisure and hospitality, up by 41,700 jobs. Other sectors that added jobs over the year were construction; trade, transportation, and utilities; government; information; manufacturing; and financial activities. Other services and mining and logging posted job declines.
  • California’s unemployment rate remained at a record-low 4.2 percent in June. Many metropolitan areas showed increases in unemployment rates.
  • All California metro areas saw employment rise over the past three months.
  • San Francisco and San Mateo counties added 2,000 jobs from May, and the unemployment rate increased to 2.6 percent in June. The information industry added the most jobs, followed by professional and business services. The government and educational and health services sectors experienced significant losses from last month, shedding a respective 1,000 jobs and 1,400 jobs. On an annual basis, the two-county area added 16,900 jobs, with half of those in professional and business services — particularly computer systems design and related services. The second-largest increase was for health care and social-assistance jobs. The information sector experienced the third-largest net increase. About three-quarters of new jobs added were in high-income sectors.
  • Santa Clara and San Benito counties added 8,100 jobs in May, and the unemployment rate increased to 3.0 percent. As in the San Francisco metro are, the information sector led the gains, adding 4,600 jobs for the month, more than its 10-year average gain of 1,700 jobs at this time of year. The professional and business services sector followed. Losses were reported in the leisure and hospitality and government sectors. Over the year, the region added 33,800 jobs. While information was the biggest job gainer, all other industries added jobs except trade, transportation, and utilities; leisure and hospitality; and mining and logging. The leisure and hospitality industries have seen large swings in employment this year.
  • Alameda and Contra Costa counties added 2,200 jobs in June, with the unemployment rate increasing to 3.4 percent. The largest gains were in the leisure and hospitality sector, particularly accommodation and food services, as well as in the manufacturing and construction industries. Government shed the most jobs from last month due to a seasonal decrease in state government educational services. Over the year, the region added 18,400 jobs, with the construction and professional and business services sectors experiencing major gains, surging by a respective 4,700 and 4,500 jobs. The financial activities, leisure and hospitality, information, and other services sectors reported job losses.
  • Marin County’s unemployment rate increased to 2.7 percent in June, with no jobs added from May and a decrease of 600 jobs from last year. On an annual basis, most jobs lost in Marin County were professional and business services positions, though the information, financial activities, leisure and hospitality, government, and other services sectors also reported annual losses.
  • Sonoma County’s unemployment rate increased to 3.0 percent and posted a robust increase of 4,300 jobs from last June. The largest annual gains were in the educational and health services, manufacturing, and leisure and hospitality sectors. The professional and business services, other services, and government sectors reported job losses.
  • Napa County’s unemployment rate increased to 3.1 percent in June, with 100 jobs created on an annual basis. The largest declines came from the manufacturing; educational and health services; and trade, transportation, and utilities sectors, while the leisure and hospitality industries showed the biggest gains.
  • Los Angeles County added 4,400 jobs in June, and the unemployment rate inched up to 4.5 percent. Nonfarm employment increased for the sixth month in a row to its third-highest level on record. The professional and business services sector added the most jobs over the month, accounting for 80 percent of the total nonfarm employment increase. Job additions in the professional, scientific, and technical services sector and management of companies and enterprises drove up employment levels, but the overall gains were offset by a decline of 500 jobs in administrative and support and waste services. The seasonal summer break led to a drop in educational and health services positions, while smaller-than-normal job losses were reported in private educational services. Over the year, Los Angeles County has created 66,400 jobs, with educational and health care services accounting for half of the growth — specifically in health care and social assistance. Private educational services added another chunk of jobs, which were mostly at colleges, universities, and professional schools. Retail trade accounted for most of the industry job losses, with cutbacks focused in clothing, clothing accessory, and department stores.

Selma Hepp is Pacific Union’s Chief Economist and Vice President of Business Intelligence. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.

(Promotional photo: iStock/brians101)

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Shared with permission from the Pacific Union Blog