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California's unemployment rate drops to 7.8%, lowest in six years

Jobs and WorkplaceJob MarketBusinessJob Reports and StatisticsUnemployment and LayoffsRestaurant and Catering IndustryConsumer Goods Industries
Construction is the fastest-growing sector in California
The Bay Area's technology industry led the state's economic recovery
Even with a drop in April to 7.8%, California's jobless rate still is above the U.S. figure of 6.3%

California's unemployment rate dropped below 8% last month for the first time in nearly six years as employers put the state on the verge of recovering all of the jobs lost during the Great Recession.

Employers added 56,100 jobs in April, far more than the meager 14,800 positions created in March, according to a report Friday from the California Employment Development Department.

"It's a huge sign of progress," said Jordan Levine, an economist at Los Angeles consulting firm Beacon Economics. "That suggests we'll be back at pre-recession peaks in the next few months."

During the recession, California lost 1.3 million jobs and the unemployment rate soared to 12.4%, remaining stubbornly high throughout the recovery. Even with a drop last month to 7.8% from 8.1%, the jobless rate still is well above the national figure of 6.3%.

California's job market, though, is growing faster than the nation's — 2.3% since April a year ago compared with the national rate of 1.7% — partly because the state's once-devastated housing market has regained much of its vitality.

Although construction is the fastest-growing sector statewide, the Bay Area's technology industry had led the state's economic recovery, and continues to play a major role.

"Technology is key … and California possesses that strength," said Lynn Reaser, chief economist at the Fermanian Business and Economic Institute at Point Loma Nazarene University. "California is now in sight of recovering all of the jobs lost during the recession."

In fact, state figures showed, California is only 25,200 jobs short of its pre-recession peak reached in July 2007.

But the good news in the April jobs report doesn't mean everyone who wants a job can get one. Braden Smothers, 44, who moved to Los Angeles from New Orleans two years ago looking for restaurant or bartending work, has had little luck.

He landed some interviews, including one with Panda Express, and worked a short stint as a security officer near Los Angeles International Airport. But even small jobs are "slim pickings" for someone with only three years of college and no degree, Smothers said.

"You look at the people working at the restaurants right now, and they're overqualified for their jobs," he said. "There's so much competition; it can be depressing."

He's starting to consider relocating to Atlanta, where he used to live.

"As a whole, maybe the jobs market is getting better, but there's not as much opportunity in my field for me," Smothers said.

Both geographically and across most industries statewide, hiring picked up considerably in April. The only job losses recorded were in government and the volatile information sector, which includes the publishing, film and television industries. Manufacturing employment has been flat for the last year.

The healthcare sector, which expanded even during the recession, accounted for nearly a fifth of April's job gains, or 9,900. Economists said demand for healthcare jobs will be strong as 1.4 million Californians now have health insurance coverage under President Obama's healthcare law.

Physicians Choice Home Health Inc. in Torrance has filled 10 positions for registered nurses, licensed vocational nurses, physical and occupational therapists and office workers. And it is hiring for more, human resources employee Julie Hiebert said.

"We're getting so many referrals every day that we need more assistance in the intake office," Hiebert said. "There's a big push into new geographical areas. It's definitely busy right now and there's definitely more demand."

Further evidence of the state's progress lies in the hard-pressed region of the Inland Empire.

The area shed thousands of jobs after the housing bubble burst. It struggled with double-digit unemployment during the early stages of the recovery.

Friday's data, however, showed that its luck is turning. Since April, Inland Empire employers expanded payrolls 2.4% — a pace akin to economic stalwarts San Francisco and San Jose. Employers added 4,600 jobs there last month, which helped the area's unemployment rate fall to 8.3% from 9.4% in March.

"We are now beginning to gain some serious momentum across multiple sectors," said Rep. Mark Takano (D-Riverside), who was recently appointed to the House Education and Workforce Committee.

"We can continue that momentum by working to bring more manufacturing and construction jobs to regions like the Inland Empire that struggled during the recovery but are now making solid gains," Takano said.

Although the state's hiring pace has improved, economists cautioned that California still has ground to make up. Its unemployment rate is still well above the 5.4% recorded in July 2007, when the state had 15.5 million nonfarm jobs.

"We almost have all the jobs back, but the population and labor force grew," said Esmael Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University. "That's why unemployment is higher."

The mix of jobs has also changed, Adibi said. More jobs are part time and concentrated in the service and retail industries, which are often low-paying.

The job gains were broad-based and pushed employment in several industries, including tourism and professional and business services, to pre-recession peaks.

Construction, aided by the housing recovery, has seen strong employment growth as developers rush to build apartment units and new homes for a growing population. It added 7,100 new jobs last month.

And though technology giants such as Google Inc., Apple Inc. and Facebook Inc. have slowed their torrid hiring pace, the professional, scientific and technical services sector still is fueling job growth in the region, adding 4,700 new jobs.

All Southern California counties posted job gains. Los Angeles County added 8,900 jobs; Orange County, 3,900; San Diego County, 2,900; and Ventura County, 800.

California's unemployment rate remains the fourth-highest in the country, behind Rhode Island at 8.3%, Nevada at 8% and Illinois at 7.9%.

ricardo.lopez@latimes.com

tiffany.hsu@latimes.com

Twitter: @rljourno

@tiffhsulatimes

Copyright © 2014, Los Angeles Times
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