California posts biggest job gain since May 2006

The state’s struggling labor market showed signs of life in October, adding 39,000 jobs in the biggest employment increase since May 2006.

The gains were widespread, with employers adding positions in nearly every sector of the economy. But it wasn’t enough to make a dent in California’s unemployment rate, which remained at 12.4%, according to figures released Friday by the state Employment Development Department. Still, the performance was a major improvement over September, when payrolls declined by 53,600 jobs.

October “marks the first solid month of recovery for the California economy,” said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto. “If these gains are confirmed in the following months California will have finally turned the corner toward job growth and reducing unemployment.”


Leading the way was professional and business services, which added 14,800 jobs, followed by trade, transportation and utilities, which increased by 7,600 jobs. That sector includes retail jobs, which were up 4,300 over October 2009, a sign that stores are hiring again in anticipation of better holiday sales.

Other gainers included manufacturing (7,100 jobs), education and health services (5,200), leisure and hospitality (4,400) and government (2,800). Even the weak construction sector added 2,500 jobs.

Another positive sign for the labor market: Average hours worked per week ticked up to 40.4 in October, compared with 39.9 in September.

“This is, relatively speaking, the best news we’ve gotten this year,” said Esmael Adibi, an economist with Chapman University in Orange. “We have bottomed out and we are creating jobs.”

But California’s employment hole remains huge. The state still has 1.3 million fewer jobs than it did at its peak in July 2007. Key sectors including housing continue to struggle. The state has lost more than 400,000 construction jobs since early 2006. More than 2.2 million Californians are unemployed; nearly half of them have been jobless for more than six months.

“Our losses are starting to become smaller,” said Jerry Nickelsburg, senior economist with the UCLA Anderson Forecast. But “we’ve got some climbing to do.”

Gardena resident Francisco Ciliani, 27, has been looking for a welding job for eight months. Unable to find work or support his daughter, he gave up his North Hollywood apartment and moved into a trailer park to save money.

“I need a job ASAP,” he said. “I’m almost about to lose everything.”

Hundreds of thousands of Californians are in a similar position. An estimated 400,000 could lose their unemployment insurance benefits next month, according to the National Employment Law Project.

That’s because Congress on Thursday voted down an extension of unemployment benefits. The current set of federal extensions expires Nov. 30.

A report released Friday by the California Budget Project warned that allowing benefits to expire “would deliver a sharp blow to the economy and could endanger the fragile recovery.” The report cautioned that failure to extend the benefits could cost 1 million jobs nationally.

Still, economists hope that the recent job numbers will be the first of many gains that could help lift the state out of its economic stupor.

“I think we’re moving in the right direction,” Chapman’s Adibi said. “As we move forward, unemployment should go down.”

Los Angeles County added 29,900 jobs in October, though the unemployment rate was unchanged at 12.6%. Gains in government and educational and health services accounted for more than 80% of that growth.

The state numbers are seasonally adjusted to mitigate monthly fluctuations. Most county numbers are not adjusted.

In Orange County the unemployment rate fell to 9.1% from a revised 9.6% in September with the addition of 13,200 jobs. The Inland Empire, which includes Riverside and San Bernardino counties, added 9,400 jobs, sending the region’s unemployment rate down to 14.2% from a revised 14.8% in September. Neither of those rates are seasonally adjusted.

San Diego County added 5,600 jobs, and its unemployment rate fell to 10.2% from a revised 10.7% in September. In Ventura County the unemployment rate fell to 10.5% from 11.1% in September.

These gains were offset by losses in Fresno County, which shed 11,600 jobs, and Stanislaus County, which lost 2,800.

Ira Royal, a 61-year old administrative assistant, has been trying to find work since 2007. The onetime truck driver said he was living in his car for much of 2009, until friends offered him a room in their home.

Now he carries just three shirts and three pairs of pants as he moves from home to home, spending his days in a job center looking for work.

“I’m trying to work with what I have,” he said. “I try to make the best of it.”