California Posts Solid Job Gains in October

California’s economy added 34,800 jobs in October, the biggest one-month hiring binge in nearly three years.

The government’s report Friday raised hopes that the state’s long-awaited employment recovery had begun. Last month’s job increases were spread across a variety of industries, including business and professional services, construction and tourism, the state Employment Development Department said.

The biggest net gains, nearly 31,000 jobs, came in the sprawling sector that includes retail stores. Analysts cautioned that those figures could be artificially inflated because of a burst of hiring by grocers in anticipation of the supermarket strike in Southern and Central California, which began Oct. 11.

Still, even accounting for that potential distortion, analysts said California probably still had a month of solid job growth, only the third this year.

The state’s unemployment rate rose in October to 6.6% from a revised 6.5% the month before. But experts said that was mainly because more than 100,000 Californians flooded back into the job market -- a signal that openings may be becoming more plentiful.

“People typically reenter the labor force when they feel their prospects are good or improving,” said Richard Holden, chief of the EDD’s labor market information division. “That’s a hopeful sign.”

Also encouraging was the upward revision of September’s employment data. State analysts previously had estimated that California lost a net 16,600 jobs that month, a figure they since have scaled back to 10,900.

The U.S. Labor Department had reported last week that the economy gained jobs for three consecutive months, with a strong showing in October of 126,000 net new positions. Regional economists figured that California eventually would follow suit.

Elizabeth Hill, California’s legislative analyst, said Friday that the October payroll growth “helps to validate our assumption that the jobs outlook will brighten and indeed that California has turned the corner.”

Hill noted that the strengthening employment situation would result in a corresponding increase in state revenues, although she cautioned that the improving economy would not, in and of itself, close the persistent gap between what the state spends and what it takes in.

Other economists similarly expressed muted optimism about the state’s latest job gains, the largest since December 2000.

“It’s just one more piece of evidence that the economy is not falling back into recession,” said Michael Bazdarich, director of the Forecasting Center at UC Riverside. “We’re still in the very early stages of a job expansion.”

Not all sectors performed well last month. After a small increase in jobs in September, the state’s manufacturing sector reverted to its losing ways, if only slightly, with payrolls dropping by 700 positions in October. Employers in financial services and education and health fields also shed positions, as did companies in the information category, which includes movie and Internet firms.

The biggest losers were local, state and federal government payrolls. Reflecting the state’s continuing budget crisis, public-sector employers slashed a net 12,200 jobs in October. Over the year, that sector has shrunk by 39,100 jobs, or 1.6% of its base, second only to manufacturing.

Meanwhile, six of the 11 so-called “super sectors” tracked by state employment analysts posted jobs gains last month.

One of the most closely watched is professional and business services, which added a net 9,000 jobs. That sector includes highly compensated workers such as accountants, lawyers and computer professionals, as well as positions farther down the food chain that are a barometer of future hiring.

Those include temporary-help agencies, whose workers typically are the first fired during an economic downturn but the first hired during an expansion. The EDD data show that temp agencies in California have added workers for six straight months.

“We are seeing a nice little pickup in our business,” said Darin Meadows, Los Angeles-area spokesman for Manpower Inc., one of the nation’s largest suppliers of temporary workers. “Employers are still cautious, but they’re beginning to feel better about things.”

Leading the job growth in October was the massive trade, transportation and utilities super sector, which includes retail stores. But the gains probably were skewed by the strike that is gripping the grocery industry.

The EDD’s Holden said certain payroll data indicate that supermarket employers boosted hiring abnormally in October, as Vons, Ralphs and Albertsons geared up for the labor dispute by hiring thousands of replacement workers.

At the same time, because of the timing of the monthly employment survey, he said, the state’s sampling data did not reflect the strike and lockout of about 70,000 unionized grocery workers. Even so, Holden said, it’s likely that California’s labor market still showed “respectable” growth last month.

But some job seekers aren’t so sure.

Dan Johnson of Los Altos has not had a full-time job since 2001. The former Internet project manager was so desperate for work last Christmas, he said, that he took a temporary position as a department store elf. Recently he moved back in with his parents.

From the 28-year-old’s perspective, the notion of a turnaround is “garbage.”

“It seems to me that the only kinds of jobs being created here are the kinds of jobs that people can’t live on,” Johnson said.

Indeed, a separate household employment survey also conducted by the EDD suggested that the bulk of October’s gains were in part-time jobs. State employment figures show that 649,000 Californians -- fully 4% of the workforce -- were employed part time in October even though they would like to work more than 35 hours a week.

Friday’s EDD report indicated that Los Angeles County’s seasonally adjusted unemployment rate rose to 6.9% in October from 6.8% the month before. The jobless rates for other Southern California counties held steady, ranging from 3.7% for Orange County to 6.4% for Riverside County.

Times staff writer Jeffrey L. Rabin in Sacramento contributed to this report.