Wells Fargo Securities Economics Group: California’s Job Growth Is Stronger Than Initially Reported
Area Development Online News Desk (03/21/2013)
California’s Economic Recovery Is On Surer Footing
Improvement is still clearly evident from California’s latest employment
figures, even though the state’s unemployment rate remained stubbornly
high at 9.8 percent. Both the number of Californians looking for work and
the number working increased during the month, with the rise in the labor
force, or those looking for work, slightly outpacing the increase in civilian
employment, or those working. The stronger labor force numbers for
January may be a sign that the improvement in California’s economy is
beginning to pull job seekers back into the labor market. One month does
not make a trend, however, and January’s data can be tricky to interpret
due to revised data on population trends.
The year-over-year data still show steady improvement. California’s
unemployment rate has fallen 1.2 percentage points over the past year, as
civilian employment increased 2.0 percent and the civilian labor force rose
just 0.9 percent. In terms of people, 348,600 more Californians were
working in January 2013 than were working in January 2012.
Job Gains Were Stronger than Originally Reported
Nonfarm employment data have been revised back to March 2011,
reflecting the inclusion of more actual data from the Quarterly Census of
Employment and Wages through March 2012 and improved estimates after
that. The revised figures show that California has added 135,900 more jobs
since March 2011 and raised 2012 year-end gain from 237,800 to 305,500
net new jobs.
The January employment data show that California’s economy maintained
solid momentum going into 2013. Nonfarm employment is currently up
2.0 percent over the past year, producing a net gain 0f 286,100 jobs. While,
hiring has picked up across nearly every industry, it is showing signs of
slowing in the state’s important information sector. The job mix is also
more heavily weighted toward traditionally lower-paying jobs in the leisure
and hospitality sector, which alone has accounted for just over one in five of
the new jobs created across the state during the past year. Hiring also has
picked up in retail trade as well as in some of the state’s better-paying
sectors. Firms in the professional and business services sector added
83,300 jobs over the past year, and hiring also increased in construction
and financial services.
Employment data for the greater Los Angeles area were also revised higher.
As with the state, gains have been fairly broad-based, but have recently
been more heavily weighted toward lower-paying sectors, which tend to
employ large numbers of part-time workers.