State Posts Gain of 17,600 Jobs in May

California’s job-creation engine remained in cruise control in May, producing a net gain of 17,600 jobs, the state Employment Development Department reported Friday.

The modest increase, slightly below the revised gain of 18,300 in April and 21,000 in March, suggests that the state’s economy continues to grow at a steady but unspectacular pace, analysts said.

California is being driven by many of the same factors fueling national economic growth: relatively low interest rates, resilient consumer spending, a booming housing market and rebounding business investment. Some of California’s most important industries, such as tourism and aerospace, are perking up.

However, the Golden State -- like the nation at large -- is still not producing enough jobs to keep up with population growth. Employers continue to show caution in hiring, seeking to boost productivity of existing workers whenever possible.

California’s economic growth “is pretty steady now,” said Howard Roth, chief economist for the state Department of Finance. “But we need to get above 20,000 jobs a month to keep up with population growth.”

Economists pointed to a number of positives in the latest state report.

For one, the state appears to be outpacing the nation overall in hiring, after lagging behind for much of the four years since the 2001 recession. California’s total employment in May was 1.8% higher than a year before, versus a 1.5% increase nationwide, Roth said.

California also got more than twice its share of the nation’s job creation last month. U.S. payrolls grew by a disappointing net 78,000 jobs in May, the lowest monthly gain in two years. California should have gained a net 8,600 jobs, based on its 11% share of the nation’s workforce.

Further, the Golden State’s jobless rate has been falling faster than the rate nationwide. The state’s unemployment rate was 5.3% in May, down from 5.4% in April and 6.3% a year before, the Employment Development Department reported Friday. The nation’s rate stood at 5.1% in May, down from 5.2% in April and 5.6% a year before.

“This suggests that economic growth in California may be more robust than the rest of the country,” said Keitaro Matsuda, senior economist at Union Bank of California.

California’s job growth in May was powered by a broad swath of industries. Nine of the 11 sectors the state tracks added jobs last month, led by government with a net boost of 5,300.

That was followed by educational and health services (up 4,300) and trade, transportation and utilities (up 4,000). The two declining sectors were professional and business services (off 2,100) and natural resources and mining (down 200).

But even the drop-off in professional and business services -- which had been one of the state’s stronger job creators last year -- might be seen as a positive, Matsuda said.

It could suggest that more temporary workers, a key component of that category, are getting full-time permanent jobs, he said.

“That shift often happens when the economy recovers,” Matsuda said.

Another positive: The manufacturing sector has been adding jobs in recent months in California -- gaining a net 1,000 in May -- while it has been declining in the rest of the country. This could reflect the greater technology orientation of the state’s manufacturers, which also makes them more energy efficient and less prone to rising energy prices, Matsuda said.

Orange County boasted the state’s lowest unemployment rate in May, at 3.3%, the Employment Development Department reported. Other Southern California counties with relatively low rates were Santa Barbara at 3.5%, San Diego at 3.8%, Ventura at 4%, Riverside at 4.5% and San Bernardino at 4.7%. The state’s highest unemployment rate was in Imperial County at 13.2%.

Los Angeles County posted a 5.5% jobless rate, but it has been adding jobs at a 2% annual clip in the last three months, said Christopher Thornberg, senior economist at the UCLA Anderson Forecast.

That strong growth reflects increased hiring in the entertainment industry, which has cut back on so-called runaway production as the weakened dollar makes it more expensive to film overseas, Thornberg said.

“That’s a good sign for L.A.,” he said.