Wells Fargo Securities Economics Group: California’s Job Growth Is Stronger Than Initially Reported
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.
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