State Posts Modest Gain of 17,600 Jobs in March

California added a net 17,600 jobs in March, the state Employment Development Department reported Friday, a modest showing that suggested the state’s economy might be slowing along with the nation’s.

The Golden State is subject to the same combination of high gasoline prices, lagging consumer confidence and sluggish retail sales that sent stocks plunging this week and led several economists to lower their estimates for U.S. first-quarter growth.

“It’s hard to expect much acceleration in hiring with that much uncertainty out there,” said Steve Cochrane, regional economist at Economy.com, referring specifically to high oil prices. “This may be all we can expect over the next six months until the pace of oil prices becomes more certain.”

Although high pump prices and slackening shopping don’t necessarily spell doom for the state’s economy, Cochrane said, they were inevitably a drag.

“There’s no additional risk to a state like California,” Cochrane said, “but there’s no escape” either.

Still, the March job report cheered some analysts because it showed that California’s job creation outpaced the nation’s on a relative basis. Only a net 110,000 jobs were added nationwide in March, fewer than half the positions most economists had forecast.

“We’ve entered a period where, for a couple of months at least, California is doing better than the rest of the nation,” said Stephen Levy, director of the Center for the Continuing Study of the California Economy in Palo Alto. “It’s OK for California, but I worry about the nation.”

The jobs added in March lagged behind February’s 27,600 net gain, and the figure was below the roughly 20,000 needed to absorb new entrants to the job market.

The unemployment rate dropped to 5.4%, the lowest since 2001, but economists said that was probably because record numbers of people had been out of work so long that they no longer received unemployment insurance and were no longer counted.

As a result, the percentage of California residents in the workforce is at a 15-year low.

“People are either going back to school or dropping out of the job market,” said Esmael Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University in Orange. “That’s why you see the false comfort in this low unemployment rate. That’s not indicative of a really strong economy.”

John Humphreys found that out the hard way. The 59-year-old Huntington Beach engineer quit his job at Cisco Systems Inc. at the height of the tech boom in 2001 to travel and has been unable to get a regular job since.

“It’s tough, emotionally, to keep positive about it,” Humphreys said. “You get a little depressed. How am I going to get back into the workforce?”

Still, Adibi said, the latest job report holds some hope for people like Humphreys. Almost all sectors added jobs, and the information arena, a longtime laggard, was up 0.5% from a year earlier and led all sectors by creating 6,800 jobs in March.

The breadth of the job creation is a good sign, Adibi said, even if the slow pace is not.

“It shows that job creation is spilling over the sectors and is becoming more broad-based,” he said.

Cochrane of Economy.com also pointed to the 3% growth since March 2004 in jobs in the professional and business services category.

“The basic industries in the economy, be it aerospace, entertainment or tech, are robust enough now that they are having to go out and use other services: legal services, accounting, advertising,” Cochrane said.

Chris Thornberg, a senior economist with the UCLA Anderson Forecast, was more pessimistic.

“Clearly the economy is starting to slow down,” he said. “And it’s going to get worse before it gets better.”

By his calculations, Silicon Valley has lost 3,200 jobs since March 2004 after slowly creeping out of the trough of the dot-com bust. And the fastest job growth continued to be in the construction industry -- up 6% since March 2004 -- which is dependent on a sizzling housing market that Thornberg and some other economists see as overvalued.

“We’re adding all these construction jobs,” Thornberg said, “and eventually they’re going to go away.”