California loses jobs in March, though unemployment stays at a record low


In a signal that California’s economic engine could be slowing after a remarkable run, the state lost 7,200 net jobs last month and increases in February were far less than originally estimated, according to data released Friday by the Employment Development Department.

The decline was the first in nearly two years and follows a disappointing national report that showed the U.S. added only 103,000 jobs in March.

In California, the drop-off was broad-based, with eight of the state’s 11 industry sectors reporting job losses. February’s increases were revised sharply down, to 1,200 from 14,000.


“The overall economic momentum is slowing both for the U.S. and California,” said Sung Won Sohn, an economist at Cal State Channel Islands. “We’ve reached an inflection point.”

Economists, however, cautioned against reading too much into one month’s data and said the economy still appears healthy. They noted the state unemployment rate held steady at a record low of 4.3%.

A slowdown also doesn’t mean the economy will stop growing. Some slowing has been expected following a stretch of job growth that is the second-longest since World War II.

“At some point it will end, but there are not indications from this month’s number that it is going to end any time soon,” said Michael Bernick, an attorney with Duane Morris and a former director of the Employment Development Department.

In March, the largest decline from a month earlier — about 4,600 jobs — was in the “other services” category, which includes things such as equipment repair shops and nail salons.


Construction lost 4,400 jobs, and the trade, transportation and utilities sector lost 1,900 jobs. Other sectors that saw losses were professional and business services, leisure and hospitality, financial activities, information and government.

Regionally, Los Angeles County lost 4,000 jobs, Orange County lost 2,700 and the Inland Empire saw a decline of 1,400.

Lynn Reaser, chief economist of the Fermanian Business & Economic Institute at Point Loma Nazarene University, said it’s unclear whether the last two months of disappointing data are a reflection of employers growing more cautious. They could be having a hard time finding workers, she noted. Not only is the unemployment rate at a record low, but businesses say sky-high rents and home prices are hobbling their recruitment efforts.

In particular, Sohn said that dynamic has helped cause a sharp slowdown in the tech industry, which is concentrated in the expensive Bay Area. In 2016, the sector averaged 2,250 net new jobs each month. Last year, that fell to 600. This year, the sector has averaged a monthly loss of nearly 1,700 since January.

“We hope to grow our businesses in California, but it’s difficult to recruit and retain employees when they could accept jobs in other states and pay a fraction of California’s housing costs,” a group of tech chief executives wrote in a January letter supporting a bill that would’ve dramatically increased home building near transit stops. That bill died earlier this week.

Among the signatories were the chief executives of Twitter and cloud computing giant Salesforce, which recently opened the tallest building in San Francisco.


Twitter: @khouriandrew


1:20 p.m.: This article was updated throughout with additional analysis and comments from economists.

This article was originally published at 10:20 a.m.