California gains 3,700 jobs in December, pushing unemployment down to 5.2%

The Port of Los Angeles
The Port of Los Angeles
(Rick Loomis / Los Angeles Times)

California employers capped off a solid year of job growth in 2016 by adding a net 3,700 jobs during the month of December, the Employment Development Department reported Friday.

The unemployment rate was 5.2%, down from 5.3% in November. The national jobless rate was 5% in December.

“An unemployment rate in the 5% range is what you see in California when it’s firing on all cylinders,” said Robert Kleinhenz, an economist at Beacon Economics, a Los Angeles-based consulting firm.

A rising minimum wage, as well as new labor laws mandating paid sick leave and increasing the liability for labor violations, have not prevented employers in the state from adding to their payrolls.


“There may be some effect of the higher minimum wage on the extent to which some industries are hiring, but it’s not obvious,” Kleinhenz said.

Trade, transportation, utilities and the hospitality industries had the strongest showings last month. Combined, those sectors piled on a net 20,900 jobs.

Five industries lagged behind, cutting a net 24,100 jobs combined. Professional and business services, usually one of the strongest sectors, cut 8,600 jobs, the most of any industry in the state.

The state added jobs at a rate of 2% since December 2015, slightly more than the national growth rate of 1.9%. Growth in the state has slowed as the economy inches closer to full employment — a situation where nearly all of the people in the market for a job have one. Last December, the state posted a 12-month job growth rate of 2.9%.

Over the year the sectors that produced the largest job gains were government, trade, transportation and utilities, and healthcare. Those three industries alone accounted for more than half of the state’s new jobs in 2016.

Manufacturers in the state eliminated the most jobs last year, losing a net 7,600 employees.

The state’s unemployment rate fell to 5.2% last month from 5.9% at the end of 2015, even as more and more people started looking for work. The labor force grew by 383,900 people in 2016, but employers were hungry enough for hires to absorb the new entrants.

In Los Angeles County, the unemployment rate slipped to 5% last month from 5.1% in November, as local employers expanded their payrolls by 8,100. The jobless rate in the county has declined steadily — it stood at 6% in December 2015 — thanks to a net increase of 58,600 jobs over the year. The county also has posted lower jobless rates than the state overall for the last few months, which Kleinhenz called “pretty remarkable.”

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2:20 p.m.: This article was updated with additional details and analyst comments.

This article was originally published at 9:30 a.m.