State posts gain of 17,200 jobs in December
The shift to online commerce appears to be affecting the California job market, as retail employment in December slumped from a year earlier while hiring for couriers and messengers soared, according to state figures released Friday.
Overall, California payrolls grew by 17,200 jobs in December from the month before, and the unemployment rate climbed to 4.8% from November’s 4.6%, reflecting an increase in people looking for jobs, the state Employment Development Department reported.
The job growth last month followed a revised gain of 17,300 in November and suggested that the state’s economy continued to grow steadily, with many sectors participating. Eight of the 11 job categories tracked by the state posted net gains in jobs last month, led by education and health services with a boost of 5,200 positions.
Retailers also added jobs in the month, but they employed 0.3% fewer people than they did the previous December. By comparison, total statewide employment was up 1.1% in December over the year-ago month.
In the past, year-to-year variations in retail hiring had been chalked up to broad economic trends. People shop less in a recession and more in good times.
But the recent drop in holiday retail hiring amid an increase in overall employment showed that, this time, the retail labor market was out of step with the broader economy and was affected by changes in the way people shop, said Keitaro Matsuda, senior economist at Union Bank of California in San Francisco.
“Stores have become the places where people go and check out the merchandise and look at it,” he said. “Then, they go home and sit in front of the computer and hit a button, and it gets delivered a few days later.”
With more shoppers pointing and clicking than ever before, the holidays were good for people who wanted delivery jobs. Hiring for couriers and messengers in California was up nearly 7% in December from a year earlier.
“That is really strong growth,” Matsuda said. “This reflects the shift from storefront sales to online sales.”
Delivery service giants FedEx Corp. and United Parcel Service reported stronger demand over the holiday season.
More work means more workers. In November, UPS projected that it would hire 60,000 temporary workers nationwide to handle the surge in holiday packages, at least as many as it hired the previous year.
“That’s enough people to staff three average Fortune 500 companies,” said UPS spokeswoman Heather Robinson, who added that actual figures on the company’s seasonal hiring would be released soon.
Some of the decline in retail hiring reflected the housing slump. Hiring among dealers of building materials and supplies was down 2.5% in December compared with a year earlier.
Overall, construction added jobs in December over the previous month, thanks to the strength of commercial building projects. But construction remained the biggest drag on the economy, shedding 15,700 jobs in 2006, more than any other sector.
The question now is when the housing market will hit bottom. Many economists are projecting that the slump in home sales will be over by the end of the year.
“We may even see home prices rising in 2007,” Matsuda said. “The view has shifted over the past couple of months.”
That may be wishful thinking, said Chris Thornberg, a principal with Beacon Economics and a former UCLA economist.
“I keep hearing that the real estate markets are going to turn around, and it never ceases to amaze me,” he said. “These cycles take two years, top to bottom, when they pop. We’re only a year into it. If anything, this is different because the bubble was so much larger.”
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