California Employment Recovery Slowly Continues; EDD Revisions Show State Labor Market Has Been Stronger Than Believed
The labor market continues to improve in the Golden State, albeit still at a slow pace. Just released 2013 data shows a 1,700 position increase in nonfarm payrolls in January over December 2012 employment levels, a 0.01% bump.
California’s unemployment rate remained stuck at 9.8% in January. The state’s labor force did grow by 32,900 as new job seekers entered (or re-entered) the market, but 2,800 were unable to find gainful employment according to the EDD’s household employment survey.
The EDD has also released new revisions to 2011-2012 payroll employment data, which has shown that the California labor market recovery has been stronger than originally estimated. Prior to this standard annual revision, 2012 annual growth was 1.7%, but the revised data now shows a 2.1% annual rate of growth for total nonfarm employment in California in 2012. This translates into 91,200 more nonfarm payroll positions in 2012 than originally estimated. Revisions to 2011 data show an additional 30,700 nonfarm positions for that year as well.
The most notable revisions to the 2012 data include an additional 25,700 jobs in Professional and Business Services, 22,900 jobs in Other Services, and 21,000 jobs in Leisure and Hospitality. These strong gains, however, were partially offset by a large 21,000 downward revision to the Information sector.
The Construction industry in particular has seen strong improvement over the last year, both in the revised data as well as the new January 2013 data. Revised 2012 numbers show 16,200 more jobs for the year than originally estimated, and January 2013 data reports an additional 7,300 jobs for the month, a 1.7% month-over-month increase. With home prices trending up and a low housing supply in the state, new construction was inevitable. As a result, Construction industry is seeing much-needed hiring activity.
Other sectors providing positive job growth in January include the Leisure and Hospitality sector, which added 7,800 new jobs in January, and the Other Services industry, which posted 6,600 new payroll positions. The main detractors of growth in January were the Information and Trade, Transport, which lost 18,200 positions, and Utilities, which lost 5,500 positions.
Regionally, the January 2013 gains and losses were mixed. Both the Los Angeles and San Francisco MDs led the state in job creation for the month, adding 5,700 and 5,000 jobs, respectively. The East Bay and Inland Empire regions also posted gains for the month, adding 2,100 and 1,300 new jobs, respectively. Orange County (-1,100), San Diego (-500), and San Jose (-900) all posted losses to total nonfarm employment in January.
