State’s Jobless Rate Lowest in 10 Years : Employment: August figure dips to 5.1%, as strong retail, service sectors push payrolls to record 14 million. But job gains continue to bypass rural areas.
California employers created a burst of new jobs in August, pushing payrolls above 14 million for the first time and nudging down the state’s jobless rate to a decade low of 5.1%.
Employers added 48,400 net jobs during the month, and all major industries contributed, the state Employment Development Department said Friday.
Hiring was especially strong in retail trade and services, reflecting continued robust consumer spending, a healthy tourism season and a pickup in motion picture work. Manufacturing payrolls were up as well.
“On the whole, it demonstrates we still have a pretty broad and well-balanced expansion going on,” said Tom Lieser, an economist at UCLA’s Anderson School.
The big job gains last month followed a weak month of hiring in July. On average, employers in the state have churned out about 30,000 new jobs a month this year, a tad below last year’s pace but still at a brisk 3% annual growth rate.
That’s faster than the nationwide pace of job creation. Hence, California’s unemployment rate, which dropped from a revised 5.3% in July, has now narrowed to within a percentage point of the nation’s. The U.S. jobless figure last month was 4.2%.
But within California, big gaps in unemployment rates persist, particularly between rural and urban areas.
The jobless rate for Los Angeles County, which held steady at 5.6% last month, though above the state average, has fallen from double digits several years ago. Meanwhile, unemployment in the Bay Area and Orange and San Diego counties in the south hovered between 2% and 4% last month.
But joblessness in big farm areas such as Fresno and Bakersfield remained stuck in double digits. Farm employment is running ahead of last year’s levels, but the work is seasonal, and few leading industries are expanding. Many jobless residents there are low-skilled and aren’t able to relocate to urban centers where there are more opportunities because of the high housing and living costs.
“We have to address the whole issue of how to better utilize agricultural workers,” said Michael Bernick, director of the state employment agency.
On a statewide basis, job growth was broad-based last month.
Manufacturing, which has been sluggish throughout the nation, bounced back in California by adding 2,600 jobs. Stronger-than-usual hiring in food processing was the principal reason. In an encouraging sign for the San Jose region, computer and electronics manufacturing payrolls held steady. Asia’s improving fortunes are expected to boost that industry in the coming months.
The one negative is aerospace, which shed about 1,100 jobs in August, most of them in Los Angeles and Orange counties.
Retail payrolls grew by 14,000 last month, with general-merchandise stores and restaurants doing the bulk of the hiring.
Ted Gibson, the Finance Department’s chief economist, said the sudden burst of retail jobs may be a catch-up after very weak growth all year. California’s total retail employment in August stood just 1.2% higher than a year ago--half the rate of increase seen nationwide.
Services continued its long expansion. But many of these new jobs were in lower-paying industries such as hotels and amusement parks. In the high-end services, motion pictures added 3,700 jobs during the month, on a seasonally adjusted basis.
Construction added a skimpy 600 jobs last month, but for the year it remains the state’s fastest-growing industry. Employment at banks and mortgage institutions was down, partly reflecting the rise in interest rates that have weakened refinancing activity. By comparison, payrolls at investment banking firms and real estate operations continued to grow.
Regionally, the Inland Empire area of Riverside and San Bernardino counties and Ventura County led the state in job growth last month. San Francisco and Santa Clara counties continued to lag in new employment growth, partly reflecting the scarcity of labor there. But Oakland and Sacramento continued to expand strongly.
Los Angeles County ranked in the middle, with payrolls increasing at a steady annual rate of 2.2%. Factory employment slipped further; layoffs in aerospace and apparel industries have been the main culprits this year. But businesses that store and move goods--including air transportation services and warehousing--have added jobs at a good clip in the county this year. And as in many other parts of the state, local education has kept on hiring to keep up with requirements for smaller classrooms and the state’s robust population growth.
The latest state report pointed to one surprising weakness in Southern California: San Diego, where job growth has fallen sharply from last year’s brisk pace.
“We may have hit a cooling-off period,” said Cheryl Mason, the state employment agency analyst there.
* INFLATION RISES: Wholesale inflation in the U.S. jumped 0.5% in August. C2
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Narrowing the Gap
California’s jobless rate continued to approach the U.S. rate in August, having fallen 13.6% since June 1998, compared with a 6.7% decline for the U.S. rate.
Seasonally adjusted
California: 5.1%
U.S.: 4.2%
Source: U.S. Labor Department, California Employment Development Department
