California gains 52,700 jobs, and unemployment falls to 4.3%


The California economy closed out 2017 on a robust note as the state added 52,700 net new jobs in December and the unemployment rate fell to 4.3% from 4.6% a month earlier, according to data released Friday by the state Employment Development Department.

The Golden State has now gained jobs for four straight months, after several months of alternating job losses and gains. November’s figures were upwardly revised to a growth of 53,700 jobs from 47,400, and the unemployment rate set a new record low for a survey that started in 1976, when the method for collecting the unemployment rate changed.


“California’s economy ended 2017 with a roar,” said Lynn Reaser, chief economist of the Fermanian Business and Economic Institute at Point Loma Nazarene University. “The job gain was particularly significant in its breadth across industries.”

The biggest gains last month were seen in government, which added 10,300 jobs, and the leisure and hospitality sector, which saw an increase of 10,100.

Professional and business services, information and construction also saw big gains.

The trade, transportation and utilities sector and the mining and logging sector were the only sectors to see job losses last month.

Locally, employers added jobs as well.

In Los Angeles County, payrolls expanded by 6,000, and in Orange County, they expanded by 9,700. Riverside and San Bernardino counties gained a combined 3,500 jobs. Payrolls were flat in Ventura County.

Michael S. Bernick, director of the state’s employment department from 1999 to 2004, called the December statewide report exceptionally positive, noting that California accounted for 36% of the U.S.’ job growth last month.

“We should be, at our size, closer to 11%,” he said.

Economists say the California economy is benefiting from a variety of factors. The state’s diverse jobs base is allowing it to ride a national upswing, and wealth created by tech companies is spilling over to other sectors.


It’s also boosting the revenues of local governments, enabling them to restore services they cut during the Great Recession and its aftermath, said Robert Kleinhenz, an economist with Beacon Economics.

“The recession is in the rearview mirror,” Kleinhenz said. “We are headed into 2018 on a strong footing.”

One reason, according to Reaser, is that the new federal tax law slashed business taxes and should lead companies to invest more.

Republicans pitched the plan in part by arguing that those benefits to companies would trickle down to the average worker in wage gains. Some companies have announced one-time bonuses recently, and others — such as Wal-Mart Stores Inc. — also have announced raises.

Economists generally expect a short-term boost to the economy from the tax cut, even though they doubt it will be a game changer for long-term economic growth.

Reaser said the federal tax overhaul will help lift pay some, but the main reason she expects wage growth to pick up this year is that the falling unemployment rate will force companies to compete more fiercely for workers.


Low-wage workers have seen relatively strong gains in recent years as the labor market tightened, but overall growth has been more subdued so far.

Average hourly U.S. earnings rose 2.5% last month compared with a year earlier, not much faster than inflation.

Bernick said that could be because many people have only part-time employment and are out looking for better jobs, giving workers less bargaining power than the unemployment rate would suggest.

Wage growth has been stronger in California than in the U.S. overall. December wage data for California is not yet available, but in November, wages climbed 3.1%, compared with 2.4% nationwide.

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1:50 p.m.: This article was updated throughout with additional jobs data and with analysis from economists.

This article was originally published at 10 a.m.