California employers slashed 16,300 jobs from payrolls in April, according to data released by the state’s Employment Development Department on Friday. It was the first month that the state has posted a job loss since June 2016.
It was also the first time in about five years that California grew more slowly than the nation year over year. Since last April, the state’s non-farm payrolls have grown by 236,700, a 1.4% uptick. The rest of the country grew jobs by 1.6% over the same period.
“It’s unwise to overreact to one month of data … but it’s possible we are starting to see some moderation in growth in the state,” said Lynn Reaser, the chief economist of the Fermanian Business & Economic Institute at Point Loma Nazarene University.
Seven sectors posted job losses, including professional and business services and trade, transportation and utilities, which combined cut a net 23,400 jobs last month.
The best-performing industries were the usual suspects: The construction industry and the leisure and hospitality industry added a net 14,600 workers.
Still, unemployment fell to 4.8%, from 4.9% in March, the lowest rate since 2001. The national jobless rate last month was 4.4%.
A rise in contracting
The fact that the jobless rate fell is a sign that independent contracting is on the rise, economists said.
The California economy “is shifting away from traditional payroll jobs,” said Michael Bernick, who directed the EDD from 1999 to 2004 and is now an attorney at Sedgwick, a San Francisco law firm.
The gig economy has been expanding for years; one recent study found that almost 3 million people became freelancers from 2005 to 2015. But the state doesn’t include those workers when it conducts an official tally of jobs added or cut every month; it only considers people who are on company payrolls.
The unemployment rate does capture contractors because the figure comes from a separate survey of 5,500 California households conducted by the Census Bureau, which counts someone as employed even if they are working on a freelance basis.
“The official numbers suggest this growth in independent contracting even as the payroll numbers decline,” Bernick said.
Southern California sputters
Los Angeles County cut 7,300 jobs, as professional services and government employers reduced payrolls. The unemployment rate in the county declined to 4.5% from 4.6% in March.
Weak hiring in the information sector, especially in the movie business, also dampened hiring in Los Angeles. Since last April, motion picture and sound recording employers have cut 13,100 jobs in the county, making it the worst-performing industry over the 12-month period.
Orange County saw unemployment fall to 3.3%, well below the national and state jobless rate. But the county cut 3,100 jobs overall. The steepest losses came in the trade, transportation and utilities sector, which dropped 2,700 workers last month.
San Diego provided something of a bright spot for Southern California, adding 1,100 net jobs. That uptick paled in comparison to February and March, though, when the county added a combined 11,200 new jobs.
Pay continued its upward trajectory in April. Over the last 12 months, hourly pay for all employees in the private sector increased $1.44, or 5%, according to data from the Bureau of Labor Statistics. That dollar figure is not adjusted for seasonality.
Californians earned about $30 an hour on average last month, which is close to $4 more than the average private sector employee nationwide, the data show.
Since last April, the strongest wage growth has been in “other services,” which includes things such as equipment repair shops and nail salons, and in information, which encompasses tech firms and movie studios as well as newspapers and other publishers.
Wages in both fields rose more than 7% over that 12-month period.
In leisure and hospitality, which has been responsible for a healthy chunk of the job gains in the state over the year, workers got the slimmest raises of any industry.
Hourly pay climbed less than 3% — just 50 cents — for people waiting tables and cleaning hotel rooms in the state. Those workers already make the least of any major sector, taking home an average of $17.56 an hour in April.
The highest-paid employees in California work in information, often in Silicon Valley or Hollywood. They made $43.36 an hour on average, more than double what the lowest-wage workers in the state earn.
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2:45 p.m.: This article was updated with additional details about local employment data.
12:40 p.m.: This article was updated with details about independent contracting jobs.
The article was originally published at 9:20 a.m.