California on track for longest job expansion in recorded history

economic-straight-talk
  • California added 19,400 jobs in May bringing the
    unemployment rate down to 4.2 percent, according to the latest
    report from the state Employment Development Department
    . The lowest
    unemployment rate, 4.1 percent, was seen in second half of 2018.
  • Current job growth is at a 111-month expansion —
    the second-longest since 113-month expansion of 1960s.
  • With 282,700 jobs added over the last year, the
    1.6 percent pace of employment growth lines up with the growth rate nationally.
    Still, California’s 19,400 jobs gain accounted for a lion’s share of national
    monthly job growth, contributing 26 percent.
  • While the state’s unemployment rate declined
    slightly in May, the driver is unfortunately declining labor force which
    declined by 49,800 in May, following a 51,800 decline in April. On an annual
    basis, labor force showed only a small improvement of 136,400 or 0.7 percent
    growth.
  • In May, 7 out of 11 industries added jobs, with
    largest gain in construction (12,800), suggesting increase in new home
    construction. The second largest gain was in leisure and hospitality, up 4,500
    jobs, and government, up 1,800 jobs. In annual comparison, there is a
    relatively consistent growth in education health services followed by
    professional and business services, and a loss in financial services.
  • Regionally, Los Angeles continued with the
    largest job gains adding 8,200 between April and May, with gains largely in
    leisure and hospitality, a seasonal gain that also reflects the strength of the
    area’s tourism industry. Employment services reflected another large gain, up
    4,600 jobs. Within construction’s gains, the largest relative increase was
    among building finishing contractors, up 4 percent over the month, and 15.2
    percent over the year. Information sectors, mostly driven by motion picture and
    sound recording, showed the largest monthly declines, while finance and
    insurance have seen the largest overall annual declines, down 3,400 jobs in
    total year-over-year. The region’s employment growth over the year remains
    focused in health care and social assistance, which account for about 30
    percent of the growth.
  • In the Bay Area, gains were broad based across
    the regions, and most regions saw the unemployment rate decline again falling
    below the year-ago bottom. In San Francisco-San Mateo region, up 7,100 jobs, monthly
    gains were led by accommodation and food services, construction, and financial
    services, with a loss in private education and health services. Over the year,
    the region gained 44,900 jobs.  
  • In Santa Clara-San Benito region, up 4,900 jobs,
    gains were also led by leisure and hospitality as summer seasonal hiring kicked
    in. The region also saw strong gains in information and professional services.
    Over the year, job gains in information and computer and electronic product
    manufacturing suggests the area continues to be a big draw for tech innovation.
  • Alameda and Contra Costa counties added 6,100
    jobs in April, with construction’s specialty trade contractors leading the
    gain. Over the year, the area added 19,100 jobs with over a third in health
    care and social assistance, followed by a similar gain in professional and
    business services
  • In Marin, Napa and Sonoma counties, unemployment
    rate also declined dropping to lowest rates since May 2018. However, falling
    unemployment rates are due to declining labor force which was down 0.6 percent
    in Sonoma year-over-year, down 1.2 percent in Napa, and mostly flat in
    Marin.   
  • Figure 1 summarizes annual changes in
    employment, number of jobs added in high-income sectors, and the share of total
    jobs that were high income jobs by region.
  • Column titled Percent in High Income Sectors
    illustrates how many of the jobs added in each region were in high income
    sectors, which include financial activities, professional and business
    services, and information sector. In San Francisco and San Jose metropolitan
    areas, about 50 percent of job growth is in high-income sectors which contrast
    notably other regions, particularly Los Angeles where the diverse economy still
    hasn’t gained traction with higher-income employment growth.

Figure 1

Notes:

East Bay Area includes Alameda and Contra Costa counties

Los Angeles includes Los Angeles County

San Francisco incudes San Francisco, Marin, and San Mateo counties

San Jose includes Santa Clara and San Benito counties