State Adds 29,900 Jobs Last Month

Times Staff Writer

California employers revved up their hiring engines in July, adding a net 29,900 jobs while driving the unemployment rate to its lowest level in four years, the Employment Development Department reported Friday.

The state’s largest job gain since October suggests that its economy is picking up steam along with the nation’s, thanks to solid consumer and business spending, analysts said. The question is whether that trend can continue in the face of high energy prices, rising interest rates and slower growth in the state’s superheated housing market.

“The job gains seem to be getting better and more consistent,” said Howard Roth, chief economist for the state Department of Finance.

The job increase was nearly double the revised 16,600 net jobs added in June and topped the average 17,500 monthly increases for the last two years. It also beat the 28,900-a-month average during the 1993-2001 boom, said Employment Development Department spokesman Kevin Callori.


July’s 5.1% jobless rate, down sharply from June’s 5.4%, was the lowest since May 2001. California now has the fewest unemployed since June 2001, another milestone in the state’s recovery from the 2001 recession, which hit California harder because of its dependence on the battered technology sector. In May, the Golden State hit another milestone by surpassing the employment level in January 2001, the peak from the last cycle.

The state’s jobless rate now is only 0.1 percentage point higher than the nation’s -- closer than it ever was during the roaring 1990s, said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto. California’s jobless rate has consistently towered over the nation’s because of the state’s larger proportion of younger workers and immigrants, who tend to have higher unemployment levels, Levy said.

More good news: July’s job gains were posted across the state, including the previously lagging tech-heavy Bay Area, according to separate data released Friday by the UCLA Anderson Forecast.

“Tech is back; it’s been back for a while. But until recently it hasn’t translated into jobs because the industry had excess capacity floating around,” said Christopher Thornberg, senior economist at the UCLA Anderson Forecast. Bay Area job growth is now coming from several sectors, not just tech, he said.


“What you’re seeing in the Bay Area is a recovery that was bound to happen at some point,” Thornberg said.

Can California build on its momentum?

It depends on real estate.

Construction is by far the state’s fastest-growing sector, expanding at a 6.1% clip over the last year -- more than double the rate of any other category.


“When the housing market slows down, it will take its toll on employment,” said Steve Cochrane, regional economist at in West Chester, Pa. California is “a little more susceptible to a recession because of its exposure to the housing market,” he said.

Other sectors could pick up some of the slack, analysts said. Construction of office and industrial buildings could absorb some losses from home building. California exporters could benefit from China’s currency revaluation, which will make the state’s farm products, technology equipment and other goods cheaper in foreign markets.

But the state needs stronger growth from its biggest job sectors, Cochrane said. Trade, transportation and utilities, the largest category, grew only 0.5% in the last year. The second-largest private-sector category, professional and business services -- which includes occupations such as lawyers, architects and accountants -- expanded 1.8%.

“To have a good sustainable long-term expansion, you need stronger growth across the board,” Cochrane said.


Seven of 11 industry categories reported job gains in July, led by trade, transportation and utilities with a net boost of 9,900 positions. Construction added 9,600. Manufacturing, holding up better here than the rest of the nation, gained 5,300.

Leading the decliners was education and health services, dropping 4,900 positions. Information, which includes the wildly fluctuating Hollywood film and TV production sector, lost 4,300.

Southland counties boasting jobless rates below the statewide average included Orange at 3.9%, Santa Barbara at 4%, San Diego at 4.4% and Ventura at 4.9%. San Bernardino came in at 5.3%, Riverside posted 5.5% and Los Angeles recorded 5.7%.