Business

California adds 19,400 jobs, a quarter of all U.S. employment growth in May

Long Beach Aquarium enveils new Pacific Vision wing, Los Angeles, USA - 16 May 2019
Visitors take in the Pacific Vision wing of the Aquarium of the Pacific in Long Beach in May. Tourism is one of the sectors that drove job growth last month.
(Etienne Laurent / EPA/Shutterstock)

California job growth continued apace in May, buoyed by expanding opportunities in tourism, technology and construction.

State payrolls rose by 19,400 positions last month, on top of a revised gain of 46,000 the month before, according to data released by California employment officials.

Year over year, the Golden State added jobs at a 1.6% rate, the same as the nation as a whole. California’s unemployment rate was 4.2%, the same as a year earlier, but slightly below April’s 4.3% rate. The U.S. unemployment rate held at 3.6% in May.

“California is still one of the top performing economies in the United States,” said Christopher Thornberg, the founder of Beacon Economics, a Los Angeles research firm. “For all the headlines about a potential recession and worries about the financial market and worries about trade, you don’t see this in the data.”

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(Los Angeles Times)

However, the “paltry” 0.7% growth of the state’s labor force over the last year could hamper growth going forward, he said. The labor force figure includes both people with jobs and people looking for work.

Job growth has slowed in California in recent years because of the housing supply crisis, Thornberg said. “People are not moving to California because we are not building enough homes.”

California’s 19,400 job gain accounted for 26% of the nation’s total 75,000 job gain for the month, according to the state Employment Development Department, a ratio explained by the fact that the U.S. had a weak number last month. Month-to-month data, based on a limited survey, can be erratic.

The unemployment rate comes from a federal survey of 5,100 California households. Payroll jobs data are culled from a separate federal survey of 80,000 California businesses.

More significant, according to Lynn Reaser, an economist at San Diego’s Point Loma Nazarene University, is that California’s average monthly job growth of 25,000 this year is slightly ahead of last year’s 24,000 gain for the same period. In contrast, national job growth this year is only about two-thirds the pace seen during the first five months of last year, in part due to a weakness in manufacturing that reflects a global slowdown.

“California’s performance reflects the strength of its technology sector, tourism, healthcare, education and pent-up demand for housing and infrastructure,” Reaser said.

California workers are also receiving larger pay hikes than their national counterparts.

“While hourly wages in the private sector have climbed somewhat over 3% nationally this year, pay hikes in California have averaged more than 5%,” she said. “Some of the greater increase in California reflects the intense competition for workers in the technology sector as well as the pressure to offset the cost of housing.”

In Los Angeles County, payrolls grew by 1.4% over the year, and the county’s unemployment rate stood at 3.9% in May. In Orange County, payrolls grew by 1.1%, while the jobless rate stood at 2.4%.

Inland Empire jobs expanded by 1.7%. The May jobless rate was 3.4% in San Bernardino County and 3.6% in Riverside County.

San Diego County payrolls grew by 1.7%, and unemployment was 2.8% in May. Ventura County added jobs at a 0.8% rate. Unemployment was 3% in May.

In Northern California, where the torrid technology sector attracts workers from across the country, three counties broke the 2% unemployment barrier: San Francisco at 1.9%; San Mateo, 1.7%; and Marin at 1.9%, all historic lows.

Technology jobs, which show up in the professional and business services categories, “have been the backbone of California’s employment growth in this recovery,” noted Loyola Marymount University economist Sung Won Sohn. But the sector, which includes jobs related to electronics hardware and software, is under pressure from labor shortages and the ongoing tit-for-tat trade war with China, he said.

Year over year, 10 of California’s 11 major industry sectors gained jobs, led by education and healthcare, professional and business services, leisure and hospitality and construction. Just one category, financial activities, lost jobs over the year.