California loses 9,800 jobs in September but jobless rate falls to 7.3%
California officials said employers in the state cut their payrolls by 9,800 jobs last month, a drop that baffled economists, who say the figure belies the underlying strength of the state’s economy.
Experts widely viewed the disappointing jobs numbers as a statistical anomaly, particularly since the state has posted consistent job gains for seven months that have outpaced the national average.
The report from the state Employment Development Department separately showed that the unemployment rate fell to 7.3% in September from 7.4% in August, the lowest in more than six years and a drop from 8.1% at the beginning of the year.
“This was a good news month with one very strange number,” said Stephen Levy, director of the Center for Continuing Study of the California Economy. “It’s nonsense to say we lost nearly 10,000 jobs. Hotels are filling up, the ports are booming. This cannot have been a bad month.”
Economists said the late-summer jobs numbers often can be unreliable because of the way statisticians adjust monthly economic data to account for seasonal fluctuations, such as tourism winding down and students quitting temporary jobs to go back to school.
Some believe that the September data may reflect a correction of August numbers, which showed a large gain of more than 44,000 jobs.
“Sometimes the monthly numbers don’t make much sense,” said Mark Schniepp, director of the California Economic Forecast consulting firm. “September is a period of transition. It’s one of those months when a lot of things resume.”
Despite the net loss of jobs, Schniepp pointed to California’s solid employment growth over the last year. He predicted that the state will produce 343,000 jobs this year, slightly less than last year’s growth of more than 390,000 but more than the nation’s expected rate of increase.
Experts also were encouraged by September’s tick down in unemployment rate. The state’s jobless rate has dropped sharply from 8.8% in September last year, but it is still higher than the U.S. average, which fell to 5.9% last month.
What’s more, they noted, the fall in the rate came as the state’s labor force grew by nearly 70,000 people last month, the largest month-to-month gain in the last year. Yet the economy seems strong enough to handle the influx.
“The increase in jobs is more than sufficient to accommodate the increase in the labor force,” said Robert Kleinhenz, chief economist for the Los Angeles County Economic Development Corp.
Economists perplexed by last month’s job losses said data for the state has been looking stronger this year.
Hotel occupancy in Los Angeles County rose 2.5% in August from the same month a year earlier, according to the Los Angeles Tourism & Convention Board. The Port of Los Angeles said this week that September was its busiest month in eight years as cargo volume rose 9% from a year earlier.
In fact, economic growth has been broad-based over the last year, from higher-paying sectors such as professional services to lower-wage fields such as leisure and hospitality.
Nationwide, housing construction rose faster than expected in September, swinging up 6.3% from the prior month, according to the Census Bureau. The expansion was fastest in the West and the South.
In California, the construction industry has outpaced all other sectors, growing 6% over the last year. That, economists said, reflects a greater willingness for firms to make long-term investments.
Such data is leading experts to view the state’s loss of jobs last month as a one-time blip.
“I don’t see any particular reason to think the slowdown in job growth we’re seeing in this month’s numbers is real,” said Christopher Thornberg, founding partner of Beacon Economics. “I’ll make a gentleman’s bet that we’ll see upward revisions to these numbers.”
Even so, the state’s consistent job growth still is leaving some behind.
Venessa Silverstein of Duarte was laid off in February after working for more than two years as a chef for a nonprofit organization that helps underprivileged people in the San Gabriel Valley. She has years of experience managing banquets and weddings, but at age 55, she thinks employers are looking for younger applicants.
She has submitted more than 100 applications for executive or assistant chef spots, and is trying to get by on sporadic contract work.
“I have the knowledge, I have the skills. It’s basically coming out of my ears,” she said.
By regions, Northern California is hiring at a faster clip than Southern California, year to year. San Francisco added jobs at a rate of 3.5% since September last year, followed by the Silicon Valley-San Jose region at a 3.2% rate.
In Southern California, San Diego led the way with a 2.4% growth rate, followed by the Inland Empire at 2.1%, Orange County at 1.8%, Ventura County at 1.6% and Los Angeles County at 1.5%.
