State Posts Slower Job Growth in June
California’s employment engine downshifted in June, generating a modest increase in jobs that may reflect a temporary slowing of the state’s economic growth.
The state’s employers added a net 12,300 jobs in June, the state Employment Development Department said Friday. That fell from a revised gain of 33,200 net jobs in May, and mirrored a disappointing nationwide net job increase of 112,000 last month, less than half of what was expected. The job figures are seasonally adjusted.
California’s unemployment rate, meanwhile, dropped to 6.2% in June from 6.3% in May and 6.8% in June 2003.
Economists suggested that the June job slowdown was a blip caused by irritants such as high gasoline prices and rising mortgage rates as well as statistical vagaries, including a drop in film production employment that followed a nearly equal boost the previous month.
Also, seasonal factors such as the entrance of job-seeking high school and college students often produce errors in job estimates that will be revised later, some economists said.
It will take several months of disappointing job data to truly turn out the lights on the Golden State’s growth party, they said, adding that mortgage rates have recently turned lower and prices have stabilized at the pump.
While the June job number was modest, May’s gain was revised upward by nearly 10,000 positions. The combined employment job growth in June and May paints a much more positive picture, said Brad Williams, chief economist at the California Legislative Analyst’s Office.
“This alleviates some of the concerns that we had earlier in the year -- that lack of job growth might undermine expansion in the state,” he said.
Other aspects of the job report also pointed to continued strong growth, analysts said.
For example, California’s pace of job creation finally caught up with the nation’s, causing economists to reaffirm projections that the state soon will surpass the U.S. In part because of the tech bust of 2000, the state’s economy suffered a more severe recession and its job growth also had lagged.
But the June figures showed California payrolls up 0.9% from a year earlier, on par with the nation’s gain in percentage terms, said Sung Won Sohn, chief economist at Wells Fargo & Co.
Another positive: Jobs rose in virtually all categories, including government -- a huge employment sector that has suffered under the state’s fiscal woes. But more evidence is needed to prove that a job turnaround in government is sustainable, given that state and local agencies still face daunting budget challenges, Williams said.
Also encouraging was a slight upturn in manufacturing employment, including workers in aerospace and computer products as well as in textiles, furniture and other sectors harmed by low-cost rivals in China and other developing nations.
“We are firing on all cylinders,” said Esmael Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University in Orange. The three main forces propelling the state’s economy -- the national economy, international trade and construction -- are growing “very rapidly,” he said.
People looking for positions continued to find better luck in Southern California, where most counties enjoyed unemployment rates below the state and national average. In Orange County, for example, only 3.5% of workers went jobless in June, while in San Diego, Ventura and Santa Barbara counties, 4.1%, 4.7% and 3.4% were out of work, respectively.
Los Angeles remained the Southland’s job tortoise, continued to be Los Angeles County, with a 6.7% unemployment rate in June, up from 6.4% in May but down from 7.3% a year earlier. However, hiring in the county is picking up, as “businesses are more optimistic, and some industries are having problems finding workers,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.
Aerospace companies, for example, are scraping for highly skilled engineers, while ports and transportation concerns are seeking applicants amid a pickup in shipping and resulting traffic bottlenecks, he said.
Employment in the information category fell by 9,000, primarily because of a 9,400-job drop in movie and video production, said Suzanne Schroeder, spokeswoman for the Employment Development Department. But that sector gained 7,400 jobs in May, reflecting the up-and-down nature of Hollywood productions.
“The underlying jobs report is looking stronger, if you discount a blip in that industry,” economist Williams said.
The other category that lost jobs was professional and business services, which includes temporary worker services as well as accountants, lawyers and clerks. It has been the strongest sector over the last year, in part because some businesses have been hiring temps instead of permanent employees.
If the category doesn’t keep improving, it will stymie overall job creation because it is one of the state’s largest employment sectors, said Joseph Hurd, senior economist at the UCLA Anderson Forecast.
