California jobless rate falls to 9%
No one ever said the economic recovery would be pretty.
California eked out more growth in April as employers added 10,400 jobs, bringing the net total added over the year to 273,000. The state’s unemployment rate dropped to 9% from 9.4% the month before.
But aside from the construction sector, which gained 7,400 positions, few industries in California gave economists much to celebrate.
“There isn’t great around right now. There’s just good,” said Stephen Levy, director of the Center for Continuing Study of the California Economy. “We haven’t helped everybody yet, but we’re helping more people every month.”
The last time the unemployment rate was below 9% was November of 2008, and most economists predict that the unemployment rate will continue to shrink. But also expected is a stop-and-start recovery. In April, for instance, the information sector, professional and business services and government sectors posted declines. Even when accounting for the motion picture industry, which was responsible for some of the big job losses in the month, few other parts of the economy seemed to be really booming.
Some of California’s malaise can be linked to the global economy.
Trouble in Europe and the Pacific Rim has damped tourism, one reason that the leisure and hospitality sector gained only 2,500 jobs in the state in April. And when people around the world slow their spending, work slows in the logistics and trade industries and in the ports up and down California’s coasts.
But much of the problem plaguing recovery in both California and the nation is related to Americans’ hesitancy to spend. Though consumer confidence, as measured by the Conference Board, rose in April, retail sales grew just 0.1% after sliding in March. Companies such as Wal-Mart reported lower-than-expected earnings in the three months that ended April 30.
“The public is saving at a higher rate than we want them to save,” said Alan Whitman, managing director of Morgan Stanley wealth management in Pasadena. “It’s taking a long time to get their courage back.”
Though many consumers are seeing their home values rise and their stock portfolios getting heftier, gridlock in Washington may be making them worry about just how secure their wealth is. That’s especially true for baby boomers who have their eye on retirement and want to make sure they do so with money in the bank.
Stagnant wages for those at the bottom of the pay scale could also be holding back spending. Though workers in industries such as retail and fast food have held protests demanding higher wages, pay for those at the bottom has not budged much over the last year. Earnings for those in leisure and hospitality, for instance, grew 0.5% over the year, compared with the 1.9% of growth in pay for all private-sector employees, according to the Bureau of Labor Statistics.
Many people looking for work say the positions that are being advertised pay too little to live on.
Since leaving his job at a jewelry store, Arturo Perez has not been able to find a well-paying job in retail.
He’s gotten calls from companies that spotted his resume, but they offer only sales jobs based on commission. For many of the positions, salespeople who don’t reach certain quotas have to repay the company in weeks they have slow sales, he said.
“I’m looking for anything,” said Perez, who lives in north Los Angeles. “Based on my resume, I’m more qualified for sales jobs, they do call me, but everything seems to be commission based.”
Los Angeles County added a net 200 jobs over the month. Gains in trade and construction were balanced by losses in the motion picture and sound recording industry and in government. The county’s unemployment rate dropped to 9.9% from a revised 10.2% in March.
Big gains in the leisure and hospitality sector propelled Orange County to growth in April. The county added 3,300 jobs, pushing the unemployment rate to 5.7% from 6.3%. The statistical area of Riverside and San Bernardino counties, which had an unemployment rate of 11.6% just a year ago, saw its jobless rate drop to 9.6% in April as employers in the county added 900 jobs.
Unemployment remained above 15% in some of California’s more rural areas, including Imperial, Merced and Sutter counties. The numbers are still an improvement compared with a year ago, when much of the state was still plagued with abnormally high unemployment.
There are still 1.6 million people in the state looking for work. They are seeing their unemployment benefits shrink and their resources being scaled back because of federal budget cuts.
One such job hunter is Jeff Romig of Long Beach. Romig, 56, has been looking for a full-time restaurant job for three years, with limited success.
He’s found some part-time work selling snacks at events and handing out food in grocery stores, but he wants something more consistent to help pay the rent. For the first time ever this month, he may have to borrow money to pay rent.
“Everywhere I go in my field I get the same story: ‘We don’t have enough work for the people we have now,’” he said. “It’s just slow. Everybody’s really slow.”
Nationwide, states including Texas, New York and Florida experienced impressive job growth in April. Though each has a smaller population than California, Texas gained 33,100 jobs, New York added 25,300 and Florida added 17,000.
In addition, 18 states shed jobs in April, led by Wisconsin, which saw a loss of 24,100 jobs.
Most economists predict that the job market will pick up in the summer as consumers spend more and as tourism heats up. California’s improving fiscal situation could also lead to some gains in government jobs, said Esmael Adibi, an economist with Chapman University. He estimates the state will add 300,000 jobs this year.
“The second half of the year is going to be better,” he said. “As we go through the summer, we’re going to see better numbers.”
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