California’s Job Market Picks Up Speed in July
- Despite concerns over slowing employment growth, California added 46,700 jobs in July and revised June numbers to 21,500 new positions from an initially reported 800, according to the latest numbers from the state Employment Development Department.
- With the summer’s pickup in job additions, California’s 2.0 percent employment growth is again trending above the national rate of 1.6 percent.
- With the latest increase, California has added more than 332,000 jobs over the last 12 months, which is about 10,000 more than created during the previous 12-month period.
- The state’s unemployment rate remained at 4.2 percent, as labor-force growth continued to hold back employers. Over the last year, the state’s labor force grew by only 16,900. The labor-force shortage will make it difficult for employers to expand their operations in California, and as a result, these businesses will move their operations to other parts of the country.
- The number of unemployed Californians totaled 807,000 in July, down by 104,000 on an annual basis.
- Nine sectors added jobs from June, led by an increase of 15,100 in professional and business services; trade, transportation, and utilities; and leisure and hospitality. Losses were reported in the construction industry, down by 1,700 jobs, and financial activities, down by 800 jobs. Despite the declines, the construction sector has added a robust 38,500 positions over the past 12 months. The real estate industry also reported declines but has created 700 jobs over the last year.
- Over the last year, 10 of California’s 11 major industries have added jobs. The top three gaining industries were educational and health services, with about one-fifth of total jobs added, followed by professional and business services and leisure and hospitality. In total, those three industries added about 60 percent of all jobs. The only industry with job declines was mining and logging, down by 300 positions.
- All California metropolitan areas again saw employment rise over the past three months.
- San Francisco and San Mateo counties added 1,600 jobs from June, and the unemployment rate dropped to 2.4 percent in July. The information industry and the professional and business services sector continued to add the most jobs over the month, creating one-third of new positions.
- The government and educational and health services sectors in San Francisco and San Mateo counties also continued with significant losses from last month, shedding a respective 4,400 jobs and 1,100 jobs. While local government job losses are seasonal, this year’s decrease was larger than the 10-year average. On an annual basis, the two-county area added 18,500 jobs, with more than half of those in professional and business services — particularly computer systems design and related services. The information industry created the second-highest number of jobs, up by 4,500, while private educational and health services added 4,000 jobs and leisure and hospitality created 2,200 positions. About three-quarters of new jobs added were in high-income sectors. The construction industry shed 1,500 jobs.
- Santa Clara and San Benito counties lost 7,300 jobs in July, with both public and private educational services cutting 12,000 jobs, a seasonal trend that occurs when schools go on summer break. On the other hand, trade, transportation, and utilities; professional and business services; and leisure and hospitality continued with solid monthly increases. Over the past year, those two counties have added 30,100 jobs, with information continuing to lead at 6,900 new positions. Both the private educational services and the public educational services sectors added jobs since last July.
- Alameda and Contra Costa counties shed 7,200 jobs due to a seasonal decrease in local government educational services, which lost 10,000 jobs. By contrast, professional and business services experienced the largest increase among the major industries and added 2,700 jobs, with most of the gain coming from administrative and support services. The manufacturing sector added 1,100 jobs, with about 80 percent of the increase due to more jobs in manufacturing of durable goods. The unemployment rate in those two East Bay counties declined to 3.2 percent in July.
- Marin County’s unemployment rate dipped to 2.5 percent in July, with no jobs added from June and a decrease of 100 jobs from last year. On an annual basis, most jobs lost in Marin County were in the leisure and hospitality sector, followed by the professional and business services and information industries. The largest gain was in the trade, transportation, and utilities sector, as well as in construction.
- Sonoma County’s unemployment rate declined to 2.9 percent, and the region posted a decrease of 2,800 jobs from June but a solid increase of 4,200 jobs from last July. The largest annual gains were in the educational and health services and manufacturing sectors. The professional and business services, other services, financial services, and government sectors reported job losses.
- Napa County’s unemployment rate also decreased to 2.9 percent in July, with 300 jobs created on an annual basis due to the leisure and hospitality sector. The largest declines came from the manufacturing; educational and health services; and trade, transportation, and utilities sectors.
- Los Angeles County shed 47,500 jobs in July, as the unemployment rate remained unchanged at 4.5 percent. With the summer school break, the local government educational services sector shed 37,500 jobs, accounting for almost 90 percent of the 41,900 losses in the government sector. Likewise, the summer break prompted losses in the private educational services sector, which was responsible for two-thirds of the total 7,300 job losses in the educational and health services industry. Also, professional, scientific, and technical services and administrative and support and waste services reported a total of 4,300 job losses. The leisure and hospitality sector gained the most jobs, 6,400, mostly in arts, entertainment, and recreation and accommodations and food service.
- Over the past year, Los Angeles County has added 48,600 jobs, with leisure and hospitality accounting for 59 percent of the total gain. The performing arts, spectator sports and related industries, and food services and drinking places led the increase in the leisure sector. Secondly, health care and social assistance were responsible for most of the new jobs in the education and health services sector, while accounting, tax preparation, and booking accounted for most of the new positions in the professional and business services sector. Retail trade; wholesale trade; and transportation, warehousing, and utilities all dropped jobs on an annual basis.
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.