Capping off three years of strong job growth, California employers added another 90,100 positions in November — one of the largest monthly hiring spurts in two decades.
The Golden State exited the Great Recession among the most wounded, as a wave of job losses led to double-digit unemployment. But since the national job market bottomed out in early 2010, California has rebounded faster than all but four states.
Friday’s jobs report, showing broad growth across low- and high-wage sectors, added to experts’ confidence that California has turned a corner.
“This is real; it’s not a mirage,” said Michael Bernick, a former director of the state’s Employment Development Department. “There’s something going on out there that we haven’t seen in California in a long time.”
The state’s unemployment rate fell to 7.2% in November, down from 8.4% a year earlier. The U.S. rate is 5.8%.
More important, economists were encouraged that the rate declined even as 65,000 more workers entered the state’s labor force. That indicates the job market can keep pace with a growing pool of workers.
“After all these years, the economy is able to absorb the people left out,” said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto. “We’re dealing increasingly with the people who are more difficult to rehire, who are less experienced, whose occupations and industries are in decline. So it’s even more remarkable.”
Though experts generally avoid reading too much into monthly fluctuations in the labor market, November’s gain of more than 90,000 jobs is the state’s second-largest since 1990. Every major sector of the economy added jobs last month, with the biggest contributors being retail, leisure and hospitality, and the high-end professional services sectors.
Over the last year, the biggest gains have come in construction — a traditional pillar of middle-class jobs that is rebounding after crippling declines during the housing crash. The professional services sector also showed strong gains.
Marketing company YP, formerly known as Yellow Pages, has seen firsthand how employers have gained the confidence to hire.
YP has seen a “big, big lift” in digital advertising clients this year, as small and medium-size businesses realize that online visibility is necessary for expansion, said Jeff Federman, senior vice president and general manager of YP’s digital sales division in Glendale. YP itself has plans to hire 50 new digital sales executives in Los Angeles through mid-February — one of the largest hiring pushes in a nationwide effort.
“Our clients are spending more money,” Federman said. “We’re feeling a lot of optimism.”
Laura Donovan, 26, was hired this month as an office assistant at an entertainment media company.
That’s a step up from her last job — which had been a step up from unemployment.
“I think people started to sense my desperation and were put off by it,” said Donovan, of downtown Los Angeles. “Maybe that’s why it was so much easier to interview when I already had a job.”
November’s hiring spree was a fitting end to a year of steady job growth, but experts still pointed to lingering signs of job market weakness. California has one of the highest unemployment rates of any state when factoring in part-time workers who are unable to find full-time work.
One of the fastest-growing sectors of the state economy has been temporary employment services — a signal that companies may still be unwilling to commit to full-time workers with benefits.
And similar to the U.S. economy overall, average wages in California have barely risen during the last five years, after adjusting for inflation.
“Some industries and some occupations are not even keeping up with inflation,” said Robert Kleinhenz, chief economist for the Los Angeles County Economic Development Corp. “That continues to be the sore spot.”
Though construction jobs have been on an upswing, the number of jobs is still down more than 25% since peaking during the housing boom in 2006. Construction, along with manufacturing, have both been viewed as entryways for lower-skilled workers into the middle class, but both sectors are not expected to fully recover from losses sustained in the recession.
A major concern is that lower-skilled workers from those two industries will be pushed into lower-paying occupations like retail and hospitality.
Moreover, the Southland has continued to lag behind the San Francisco Bay Area in job growth. Employers in Los Angeles County boosted hiring by 1.8% over the last year, compared with nearly 4% in the San Jose metro area. The unemployment rate in Los Angeles County still sits at 8%.
Despite the regional variation, experts generally expect to see a continued expansion across the state in 2015.
Plunging gas prices will spur more consumer spending, and economists don’t expect the same kind of economic slowdown as took hold in early 2014, when extreme winter weather and fiscal uncertainty hampered growth.
“The head winds are behind us,” Jordan Levine, director of economic research at Beacon Economics in Los Angeles. “We can look forward to more robust growth.”