State Adds Jobs, Helped by Housing

In a sign that California is beginning to keep pace with national economic growth, employers in the state added 27,600 net new jobs in February, the best showing since October, the Employment Development Department reported Friday.

The state’s unemployment rate was unchanged from January’s revised 5.8%.

Construction activity, fueled by California’s torrid real estate sector, continued to act as an economic engine by creating 10,700 jobs last month. Construction now employs 880,900 workers, a 6.4% gain from a year earlier.

Other segments of the state’s economy also demonstrated growth.

The information sector, the employment department’s label for California’s technology industry, expanded by 9,200 positions to 484,700 in February.

The sector still remained 6,000 workers below a year earlier, but there were some early signs that computer-chip manufacturing employment was on the upswing, according to Ross DeVol, regional economist at the Milken Institute in Santa Monica.

“Those are the type of jobs the state needs,” said Christopher Thornberg, a senior economist with the Anderson Forecast team at UCLA.

Technology jobs bring dollars to California from other regions and abroad, creating a more durable base for economic expansion, he said.

One problem of the current recovery is its knack for creating “more lower-paying jobs than we have seen in other expansions,” DeVol said.

But that could be starting to change. DeVol said he saw in the latest report “encouraging signs” of nascent growth in higher-paying job categories such as scientific consulting and aerospace.

“If we see more evidence in the coming months,” he said, “we could be looking back at this as a turning point.”

Thornberg, however, said he remained troubled that much of the recent economic growth in California was based on rising property values and was concentrated in “internal” industries such as real estate and construction -- sectors that are vulnerable to sudden cutbacks.

Earlier this week, the UCLA Anderson Forecast estimated that half of the private-sector jobs created in California in the last two years were connected in some way to real estate. A cooling housing market, Thornberg warned, could easily stifle the state’s economic expansion.

At least for now, though, it looks as if “California is in for a good run of job creation during the first half of 2005,” Thornberg said.

At 5.8%, the state’s unemployment rate was down significantly from 6.4% a year earlier. The national rate is 5.4%.

“The gap [between the national and state rates] is as narrow as I have seen in a while,” said Howard Roth, chief economist for the state Department of Finance.

Roth said the gain in payroll employment demonstrated that California was now getting its share of national job creation and appeared to be more in sync with the broader economy.

Over the last 12 months, nonfarm payrolls in California have increased by 234,500 jobs, a 1.6% gain and close to the increase Roth expects for 2005. California has 14.7 million payroll jobs.

“We are seeing improvement,” Roth said.

In a separate survey of households, the state employment department found that the number of Californians holding jobs in February was 16.7 million, a jump of 128,000 from January and a gain of 372,000 from February 2004.

The department said that was “an unusually large increase in civilian employment in California,” adding that it was unclear what was behind the growth. One possibility is that it reflected new a federal Bureau of Labor Statistics methodology for measuring the workforce.

Whatever the reason, most economists focus on the payroll numbers rather than on the survey of households.

In its report, the employment department said the number of unemployed in California stood at just more than 1 million in February, up by 1,000 from January but down by 105,000 from a year earlier.

Of the unemployed, the agency said, 405,900 were laid off; 146,100 left their jobs voluntarily; and the remaining were new entrants or reentrants into the labor market or people who had completed temporary jobs.

In Los Angeles County, the seasonally adjusted jobless rate dipped to 6% from a revised 6.1% in January. Payroll employment in the metropolitan area has grown by 14,800, or 0.4%, over the last 12 months to slightly less than 4 million nonfarm jobs.

Elsewhere, Orange County saw its unadjusted unemployment rate rise slightly to 4.1% from 4%. Despite the uptick, Orange County had the lowest jobless rate of any of California’s 58 counties, the agency reported.

The Riverside-San Bernardino metropolitan area posted an unadjusted unemployment rate of 5.5% last month, the same as the revised January figure.

At 20%, rural Colusa County had the highest rate.