California adds just 8,200 net jobs in September -- much less than recent gains

California jobs chart

California employers added just 8,200 net new jobs in September. The unemployment rate declined 5.9%.

After months of robust job gains, California employers added just 8,200 net new jobs in September — a sluggish month that mirrored slower growth for the U.S. overall.

California had added an average of about 41,000 jobs each month over the last year, according to data from the state Employment Development Department. The state’s job market has still expanded at a 2.8% rate over the last year, faster than the 2% growth rate for the U.S. overall.

The state’s unemployment rate declined to 5.9% in September, the first time it has been below 6% since November 2007.

Economists said that while the monthly performance was disappointing, it’s probably a sign of tapering growth, not a major economic slowdown.


“It’s not anything to panic over,” said Mark Vitner, a senior economist at Wells Fargo who tracks regional economic trends. “It just means that instead of growing one-and-a-half times faster than the U.S., California’s job growth may move closer to the rest of the country.”

The report of slower growth in California comes two weeks after the U.S. Labor Department reported a scant 142,000 net new jobs in September, coming well below analysts’ expectations.

Experts said the slow growth in California could be a byproduct of the same woes weighing on U.S. economic growth: turmoil in financial markets, along with an economic slowdown in China that has affected exports and the manufacturing sector.

The news has raised the likelihood that the Federal Reserve will hold off on raising a key interest rate this year to avoid any further slowdown in the economy.


Exports to China represent less than 1% of U.S. gross domestic product, but they have been responsible for the bulk of U.S. export growth since the Great Recession. Although manufacturing makes up less of California’s economy than in states such as Indiana, sectors such as aviation and computer and electronic component manufacturing are already seeing waning demand from China.

Whereas imports at the ports of Los Angeles and Long Beach have been at record highs — the result of U.S. consumer demand — exports have been slowing in recent months.

“California is really the bridge between the rest of the U.S. and Asia and China, so much of what we import and export goes through California,” said Sung Won Sohn, a professor of economics at Cal State Channel Islands. “We are disproportionately affected by the economic slowdown in China, so we are going to see more of that.”

Economists cautioned reading too much into California’s September job numbers. Estimates are based on a sample of 58,000 businesses and monthly numbers are often revised. Last September, for example, California initially reported a loss of 9,800 jobs. Later revisions showed the state actually posted a gain of 39,600 jobs.

Experts said there would need to be at least two more months of lackluster job numbers to conclude that a slowdown was underway.

A series of recent economic forecasts had projected that job growth in California would be slower than it has been in recent years, but would still outpace the U.S. overall.

“That’s a natural thing to expect to happen,” said Kimberly Ritter-Martinez, an economist with the Los Angeles County Economic Development Corp. “You can’t be on acceleration mode the whole time. At some point you’re going to have to hit cruising speed.”

Sohn of Cal State Channel Islands had a slightly dimmer view. “The growth pattern will continue,” he said. “But I think the best days are over.”


Since the Great Recession sent California’s unemployment rate above 12% in 2010, higher than every state except Michigan and Nevada, the state’s economic rebound has been swift. For the last three years, California has added jobs at a rate faster than that of all but five other states.

That fits into a historical pattern for California: The state tends to fall harder during recessions and climb higher during expansions.

Over the last year, some of the fastest job growth came in the construction industry, which increased 6.4% yet is still rebounding from enormous job losses after the housing bust. Professional, scientific and technical services — encompassing a broad range of high-paying lawyers, accountants, architects and other professionals — posted gains of 6.5%.

The biggest decline came in mining and logging, tied to the oil industry, which fell 10.1% over the year.

The San Jose area, which encompasses Silicon Valley, had the fastest job growth of any metropolitan area in the state over the last year, expanding at a rate of 4.7%. In Southern California, San Diego posted the fastest job gains at 3.5%, followed by Orange County (2.9%), the Inland Empire (2.7%) and Los Angeles County (2.1%).

Get our weekly Business newsletter

A look back, and ahead, at the latest California business news.

You may occasionally receive promotional content from the Los Angeles Times.