California Maintains Record-Low Unemployment Rate in March
April 24, 2018 | Source: Compass California Real Estate Blog
- California’s unemployment rate remained at a record-low 4.3 percent in March, in a series of numbers from the state Employment Development Department dating back to the beginning of 1976. Seasonally adjusted figures, however, show a decline of 7,200 jobs from the previous month. Unadjusted numbers show an increase of 42,200 jobs from February.
- March’s decline could be due to some volatility in the seasonal adjustment of data. Over the last eight years, monthly job increases in March have averaged 69,500. Since 2010, only March 2016 showed a smaller increase of 21,300. That same month, seasonally adjusted numbers reported 24,400 job losses; however, 2016 ended with some of the strongest annual gains seen in the current economic cycle.
- Nevertheless, experts have anticipated slowing job growth, as the state’s low unemployment rate leaves fewer workers in search of occupations. In addition, high housing costs are on the minds of many workers who may be considering moving to California from other states or even those living in California who are finding the cost of living increasingly concerning.
- Over the last year, California has added 321,000 jobs for a 1.9 percent increase.
- Three industries contributing to monthly job additions were health care, up by 4,200 jobs; manufacturing, up by 1,900 jobs; and transportation, warehousing, and utilities, up by 1,600 jobs.
- Industries that reported job losses include other services, down by 4,600 jobs, and construction down by 4,400 positions. The construction sector, however, remains one of the strongest-growing industries over the last year, increasing jobs by 6.8 percent — or 54,400 jobs — from last March, the largest annual gain in that industry compared with all other states. Other industries that lost jobs include retail trade, down by 3,900 positions; financial activities, down by 1,200 jobs; and management, down by 1,100 jobs. The most common occupations in the other-services category are car detailers, automotive technicians, hairstylists, manicurists, and parking-lot attendants — generally relatively lower-paid jobs that earn less than $25,000 a year.
- In San Francisco and San Mateo counties, unadjusted March employment figures show an increase of 3,000 jobs from February, with continuing strong gains in health care and social assistance and leisure and hospitality, while professional and business services showed the largest decline, shedding 1,900 jobs. On an annual basis, those two counties have created 16,200 jobs. The professional and business services industry gained the most jobs from last year, up by 8,100 positions, followed by the information sector, which created 5,300 jobs. The other notable gains were in private educational and health services; financial activities; government; and manufacturing. Losses were most pronounced in other services; trade, transportation, and utilities; leisure and hospitality; and construction. The unemployment rate in the San Francisco metropolitan area fell to 2.3 percent in March, down from 2.5 percent in February.
- In Alameda and Contra Costa counties, the unemployment rate fell to 3.0 percent in from 3.3 percent in February, with 2,900 jobs added over the month. Most of this gain can be attributed to administrative and support services; and government; construction; manufacturing; and educational and health services. Other services led the month-over-month losses, with a 1,200-job decrease. Over the last year, the East Bay has gained 19,500 jobs, with a large majority of them in construction; professional and business services; and private educational and health services. Other services lost the most jobs on an annual basis, followed by financial activities.
- In Santa Clara and San Benito counties, the unemployment rate declined to 2.7 percent from 2.9 percent in February. The region created 1,900 jobs, most of them in local government. The information sector gained 500 jobs, above average for this time of year. By contrast, construction and other services led the losses, followed by trade, transportation, and utilities. Over the year, the region added 29,600 jobs, with the information industry jumping by 8,300 jobs, marking March the 98th consecutive month of year-over-year increases. Other major industries that posted substantial job gains over the year include manufacturing; private educational and health services; professional and business services; leisure and hospitality; and government. The other-services sector again reported the most significant losses, as seen in the rest of the Bay Area.
- Marin County’s March unemployment rate declined to 2.3 percent from 2.5 percent in February, reporting 500 job losses, mostly in leisure and hospitality and educational and health services. Sonoma County’s unemployment rate fell to 2.8 percent in March, down from a revised 3.0 percent in February. Napa County’s unemployment rate declined from 3.5 percent in February to 3.2 percent in March.
- Los Angeles County’s unemployment rate remained unchanged at 4.3 percent, with local business and government agencies creating 13,100 jobs. Government agencies led the gain, with 5,700 jobs added, 5,300 of which were in in local government, including public educational institutions. The educational and health services industries added 4,200 jobs, with health care and social assistance accounting for most of the gain. The leisure and hospitality industry created 4,000 jobs over the month; 75 percent of the increase was in arts, entertainment, and recreation businesses (up 3,000), with accommodation and food services (up 1,000) accounting for the rest of the growth. Other industries with notable monthly gains include information, manufacturing, and professional and business services. Job losses were pronounced in trade, transportation, and utilities, with transportation, warehousing and utilities leading the decline, followed by retail trade and construction. Over the last year, Los Angeles County has added 61,700 jobs. The job growth was most concentrated in the arts, entertainment, and recreation industries (up 11,000) and accommodation and food services (up 10,500). Educational and health services added 19,500 jobs, with health care and social assistance accounting for most of the growth. Industries reporting year-over-year job declines include other services and manufacturing.
- Lastly, but importantly, the seasonal decline in jobs certainly does not suggest a lack of openings. According to The Conference Board Help Wanted OnLine Data Series, California had a total of 559,286 job advertisements in March 2018, an increase of 11,105 posts from the month before. California’s supply-and-demand rate was 1.47 in March, which still suggests that the supply of jobs exceeds demand. In California’s coastal areas, the supply-and-demand ratio also increased in March to 2.67 jobs, suggesting that there are more than two jobs available for each unemployed person. The annual increase in jobs ads was largest on the Bay Area’s Peninsula, where there was almost a 24 percent gain in job ads — or 23,646 more — than at the same time last year. In Los Angeles County, job ads increased by 4.2 percent, which translates to 4,739 more listings. In both regions, businesses and government agencies advertised about 120,000 jobs in March.
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/monkeybusinessimages)