California adds jobs as its unemployment falls to 5.2%
California’s job growth continued in May as employers added 15,200 people to their payrolls, according to a state data release.
The state’s unemployment rate ticked down for the fifth month in a row, hitting 5.2%, still higher than the national rate of 4.7%, the Employment Development Department said Friday.
The gain was slight compared with April, when the state added 70,000 jobs, revised upward from an initial estimate of 59,600.
See the most-read stories in Business this hour »
Part of the reason unemployment declined may be that, for the first time in years, the state labor force shrank last month. About 9,000 Californians dropped out of the job market in May.
The state has added jobs almost every month since July 2011 and has recently been expanding employment faster than the rest of the nation. In the last 12 months, California added jobs at a rate of 2.8%, compared with 1.7% for the U.S. overall.
Los Angeles County added 4,900 jobs in May and its unemployment rate dipped to 4.9%, from 5.2% in April.
As in the rest of the state, the labor force in Los Angeles got smaller last month, as 3,000 workers on net dropped out of the job market. Employers in hospitality continued to drive local economic growth, adding 8,300 jobs in May.
Statewide, the best performing industries included business services and educational and health services, which added 12,800 jobs each and accounted for the bulk of the state’s growth.
Five industries cut payrolls by 17,200 last month. Manufacturing, which has been cutting jobs all year, slashed 5,000 positions in May.
SIGN UP for the free California Inc. business newsletter »
“We still continue to manufacture a lot of product, it is just more technology intensive. We are making more stuff with fewer people,” said Kim Ritter-Martinez, an economist at Los Angeles County Economic Development Corp.
Manufacturing is expanding in California, but that growth has come with a new reliance on technology and a smaller number of highly skilled people. The industry won’t become a job engine any time soon, economists say.
“It’s no longer a given that you can graduate high school and go out and find a manufacturing job and live a middle class lifestyle,” Ritter-Martinez said. “I don’t see this trend reversing itself.”
Construction, on the other hand, has been a bright spot for blue-collar workers. The field has added nearly 200,000 jobs since the recovery began in February 2010.
Victor Braden is one beneficiary. During the recession, Braden and his wife had to liquidate their savings to keep the doors open at their Redondo Beach company, Cornerstone Construction. They laid off 15 workers, dropping to just nine employees by 2011. Sales tumbled from $10 million to $2 million in one year.
The market roared back to life in 2012, and Braden, now 67, was able to rehire four of the people he let go and brought on six new workers, including electricians, a framer and a foreman.
One reason the company has done well: It remodels and renovates hospitals.
“That industry has been growing tremendously, leaps and bounds, and we are doing everything we can to stay abreast of the changes,” Braden said.
MORE FROM BUSINESS
L.A. startup looks to extend concierge medicine to surgery
Apple iPhones violated Chinese firm’s patents, Beijing bureau rules
Follow me @NatalieKitro on Twitter
UPDATES:
2 p.m.: This article was updated with additional analysis.
