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California adds 30,000 jobs as unemployment holds at 5.5%

California adds 30,000 jobs as unemployment holds at 5.5%
Kevin Mercado rolls a tire into position at an electric bus plant in Lancaster in September. Manufacturing jobs have tanked in the state over the last year. (Mel Melcon/Los Angeles Times)

California's unrelenting economy refused to slow in September, amassing another 30,000 new jobs even as more people seeking work opted into the labor market, according to state data released Friday.

The gain did not affect the unemployment rate, which held at 5.5%. September marked the eighth consecutive month that California employers hired more people than they fired.

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"California's economy is running hot right now," says Mark Vitner, a senior economist at Wells Fargo. The influx of nearly 118,000 new people into the labor market is a sign that the state's unceasing buildup of new jobs is luring back Californians who may have stopped looking for work during the recession.

Los Angeles County's unemployment ticked up to 5% in September, but the jobless rate was down from 6.2% a year ago. The county's labor market — which includes anyone who has a job or is looking for one — has reached about 5.2 million people, the largest it's been in the last decade and a half.

"That is a tremendous improvement, relative to the country," said Vitner. National unemployment has only declined by a tenth of a percentage point since last September.

Employers in Los Angeles increased their staff by a net 19,400 people in September. Schools returning from summer break inflated government payrolls by 21,000 people — boosting the county as new job seekers flooded the market.

Vitner's concern is that some of the fastest growing industries in the state either offer excellent jobs for highly educated people, or mediocre jobs for lower-skilled workers.

"We are adding jobs at the two extremes, in higher-paying industries and lower industries. Where we aren't seeing stronger growth is in the middle," Vitner said.

While jobs overall grew at a rate of 2.3% over the last 12 months, professional services, which include lawyers, consultants and advertisers, added jobs at a rate of 4.6%. Hospitality, including restaurants and hotels, grew at a rate of 3.6%.

The country added 156,000 new jobs last month, meaning California generated about 19% of all employment growth nationwide.

The Employment Development Department, which produces the jobs data, revised August's gain down to 48,400 from an initial report of 61,300 new jobs.

In the last 12 months, the state's payrolls grew by 2.3%, compared to 1.7% for the nation as a whole. California has outpaced the nation's job expansion every year since 2012.

Leisure and hospitality businesses were especially hungry for new hires last month, adding 13,600 people to state payrolls.

Manufacturing employers, which have been a drag on the state's economy all year, cut 8,000 jobs over the month. Manufacturers have been shedding jobs across the country this year, even as productivity in the sector reaches record highs.

California is losing jobs faster than the country overall, though, and that's partly because the state is not a great place to make things with low wage labor, says UC Berkeley economist Enrico Moretti.

"The California model is not a model of growth based on unskilled traditional manufacturing," says Moretti. "Only certain types of manufacturing production make sense here."

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Sept. 2016 30,000 Sept. 2016 5.5% Sept. 2015 6% Source: Employment Development Department @latimesgraphics California jobs Monthly net job gains Monthly unemployment rate -10 0 10 20 30 40 50 60,000 S A J J M A M F J D N O S 0 2 4 6 8% S A J J M A M F J D N O S
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UPDATES:

12 p.m.: This article was updated with additional statistics about job growth in Los Angeles.

This article was originally published at 9:45 a.m. 

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