Job Picture in California Not So Dark

After a year of teeth gnashing about why California’s job growth lagged behind the nation’s, data released Friday showed that hiring in the state in 2004 nearly kept pace with the rest of the country after all.

The state Employment Development Department also reported Friday that California gained a net 20,000 jobs in January, reversing a net loss of 10,900 positions in December.

Revised figures for all of last year showed the state’s payrolls grew 1.6% since January 2004, virtually on par with the national clip of 1.7%. Previously, California job growth was pegged at about 1%.

“Despite all the stories that have been written about the demise of the California economy, we’re expanding at the same rate as the nation,” said Ross Devol, director of regional economics at the Milken Institute.

However, economists said, matching the nation is nothing to brag about, because U.S. job growth has been sluggish. January’s modest job growth shows that the state’s recovery is solid but unspectacular -- also mirroring the rest of the country, economists said.

The state’s unemployment rate fell in January to 5.8% from a revised 6% in December, partly because the labor force shrank, signaling that many people had called off their job hunts. Similarly, U.S. unemployment fell to 5.2% in January as more people nationwide dropped out of the labor market than at any time since 1988.

The way regional economists greeted the revised 2004 numbers illustrated the half-full, half-empty nature of their trade.

“This is by far the best we’ve done since the year 2000,” said Howard Roth, chief economist at the state Department of Finance. “It would be about average. It’s been a while since we’ve been at average.”

Stephen Levy, director of the Center for the Study of the California Economy, said the state was “right there with the nation with these kind of below-expectation, but positive, job growth numbers. It’s better than no growth and it’s better than negative.”

The revision of employment data is an annual ritual made possible by better numbers becoming available at the start of a new calendar year. Earlier estimates were based on surveys of workplaces, as opposed to payrolls submitted by employers.

The new numbers showed that the state added 23,700 more jobs last year than previously estimated. It also showed that a greater portion of those jobs were in lower-paying sectors.

The state revised downward by almost 70,000 the number of positions classified in 2004 as professional service -- legal, management or other white-collar posts. Categories revised upward included construction and leisure and hospitality -- sectors that tend to pay lower wages.

“Good news: more jobs. Bad news: worse jobs,” said Christopher Thornberg, senior economist at the UCLA Anderson Forecast.

Even though the mix of jobs appeared less favorable after the revision, economists drew some solace from that fact that California added jobs in almost every field. For example, professional service jobs increased 3% between January 2004 and last month. Devol of the Milken Institute noted similar increases in key areas of the state’s economy, such as a 4% jump in aerospace manufacturing and a 2.9% hike in semiconductor manufacturing.

“The increase was very broad-based,” he said, “which indicates to me that we’ve turned the corner on the jobs recovery.”

Steve Cochrane, who follows the state for Economy.com in West Chester, Pa., said the diversity of the California economy meant that it should prove resilient for the foreseeable future.

“California still looks very good because it still has this multiple set of positive economic drivers,” he said. “I don’t see a lot of downside to the California economy at the moment.”

Brandi Britton, vice president for Los Angeles County at Robert Half Inc., a staffing company specializing in white-collar positions, said she had seen hiring pick up recently.

“We’ve seen a lot of companies bringing in people, because they’ve been so lean for so long they needed people,” she said.