California’s Unemployment Rate Again Falls to Record Low in February
March 23, 2018 | Source: Pacific Union Bay Area Real Estate Blog
- California added 14,000 jobs in February, and the unemployment rate dropped to 4.3 percent — the lowest level recorded since 1976, according to numbers from the state Employment Development Department. Over the last year, the state created 383,600 jobs, a 2.3 percent annual increase.
- Industries that added the most jobs in February from the month before include professional and business services, up 8,300 jobs; construction, up 6,800 positions; and manufacturing, up 3,500 jobs. The educational and health services sector created 2,800 jobs; leisure and hospitality added 2,000 positions; and financial activities added 100 jobs. Of industries that reported job losses, trade, transportation, and utilities posted the largest decrease over the month, down 3,100 jobs; followed by other services, down 2,800 jobs; government, down 2,500 jobs; information, down 1,000 positions; and mining and logging, down 100 jobs.
- According to The Conference Board Help Wanted OnLine data series, California’s job supply/demand rate was 1.53 for February 2018, suggesting more than one and a half jobs are available for each unemployed person, also an increase from a January. Seasonally adjusted numbers show an increase of about 30,000 job advertisements from February of last year.
- A separate report issued earlier this month by the U.S. Bureau of Labor Statistics indicates that job openings jumped in January to a new cyclical high of 6.3 million. That brought the openings rate to 4.1 percent, in line with the highs of this cycle. Most major sectors had more openings than during the last cycle’s peak. In addition, the latest report suggests that more employees are switching jobs.
- In the Bay Area, San Francisco and San Mateo counties continued to benefit from gains in the professional and business services sector, which added 10,500 positions over the last year. Computer systems design and related services followed, adding 4,900 jobs. Over the last year, the two counties added a combined 18,100 jobs. From the month before, education jobs led the gains, with private educational and health services showing the largest net increase of 2,000 jobs. There were about 1,000 fewer construction jobs in the area from the year before.
- In Alameda and Contra Costa counties, the construction sector showed the largest percentage increase in jobs from last year. Overall, the area added 7,600 jobs from January and 25,400 year over year. Health care and social assistance drove 90 percent of the increase in private education and health services — 5,200 of the 5,700 jobs — while construction’s 5,600 new jobs were an annual increase of 8.4 percent. The unemployment rate in those two counties dropped to 3.3 percent in February, down from 4.1 percent a year ago. No sector posted jobs losses over the last year.
- In Santa Clara and San Benito counties, the information sector led the gains over the last year, adding 8,500 jobs, in contrast to the rest of the state, where information jobs are declining. The region gained a total of 31,300 jobs in the last year. Other sectors that created jobs include professional, scientific, and technical services and health care and social assistance. Three other major sectors with significant annual gains are manufacturing (up 3,300 jobs), construction (up 3,000 jobs), and leisure and hospitality (up 1,900 jobs). No sector lost jobs compared with February 2017.
- Marin County gained 2,100 jobs over the last year, bringing the unemployment rate to 2.5 percent. Sonoma County gained 5,100 jobs, with unemployment falling to 3.0 percent. Napa County gained 500 jobs over the last year, with February’s unemployment rate at 3.5 percent.
- Los Angeles County added 23,900 jobs between January and February, with nine of 11 sectors showing gains, while the unemployment rate remained at 4.5 percent. Motion picture and sound recording positions saw the most significant gains, up 10,500 jobs. The large increase follows a significant drop seen in January. That sector has seen large variations, with jobs down 12 percent down from last February. Over the last year, Los Angeles County added 61,500 jobs. The top three industries include the leisure and hospitality sector, with 26,000 jobs added; accommodation and food services accounted for 14,600 new jobs; and arts, entertainment, and recreation created 11,400 jobs.
- According to data released this week from the U.S. Bureau of Economic Analysis, Californians’ personal incomes grew by 4.1 percent in 2017 from the year before, a full percentage point higher than the U.S. overall. Only six states had stronger personal-income growth, all of which are located in the West. California’s per-capita personal income reached $58,272 in 2017, up from $56,308 in 2016. California’s income is the sixth highest in the nation. States with higher incomes are all located in Northeast.
- The biggest contributor to income growth in California was the information sector, which accounted for 44 percent of the gain. In Washington State, the information sector was responsible for 49 percent to the income gain. That is important to keep in mind as information sector trends change, particularly with the 12 percent decline in jobs over the last year in California. Areas with continued growth in information jobs are Silicon Valley and Los Angeles, a trend that bodes well for local economies and wealth creation.
Selma Hepp is Pacific Union’s Chief Economist and Vice President of Business Intelligence. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.
(Promotional photo: iStock/PeopleImages)