By: Dr. Lynn Reaser
News reports of companies being lured to Texas would suggest that California’s economy is under direct attack and must surely be shrinking. The latest jobs report for August might come as a big surprise.
According to data from the Bureau of Labor Statistics, California last month created more jobs than any other state with an increase of 44,200 positions. This gain was about twice that of number two, Florida (+22,700), or number three, Texas (+21,100).
California’s job gain was its seventh consecutive monthly rise. In contrast to a slowing in job growth experienced in the nation as a whole last month, California’s growth accelerated. The state also outperformed the rest of the country as a whole for the 30th consecutive month in terms of year-over-year job gains. California’s job increase relative to August 2013 was 2.1% versus the national average of 1.8%.
The state’s unemployment rate held steady at 7.4%. Both the labor force and employment expanded, which represented some good news as both more people were encouraged to look for work and more people found jobs. The jobless rate in California has also now dropped five full percentage points from its peak of 12.4% reached in October 2010. We now need even faster growth to drive the jobless rate further downward.
The gain in payrolls of companies outside of agriculture was also widespread in August. The largest gain, abstracting from seasonal factors, was posted in construction (nearly 14,000 additional jobs). This speaks to the rebound in the housing market. Other sectors also contributed to the overall rise in jobs. These included manufacturing, health care, professional services (ranging from engineers to scientists to accountants), tourism, education, and government. Retail trade was the largest negative during the month (a loss of nearly 5,000 jobs), a sector which continues to face the disruptions from the shift to e-commerce.
On balance, although future risks remain, California’s August jobs report represented another positive sign that the state remains on a firm track of economic recovery.
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