After four years of an often-sluggish recovery, California and the Sacramento region haven’t yet recovered the jobs lost during the recession – not by a long shot. But the November unemployment figures released Friday suggested the economy is picking up a fair amount of momentum.
Statewide unemployment fell two-tenths of a point to 8.5 percent, as employers added a best-in-the-nation 44,300 jobs, the Employment Development Department reported. In the Sacramento area, unemployment fell a tenth of a point, to 8 percent, as the region gained 3,100 jobs.
“We added a large number of jobs,” said Irena Asmundson, chief economist at the state Department of Finance. “People are finding work.”
In the past year, the state’s unemployment rate has fallen by 1.4 percentage points and payrolls have grown by 226,000 jobs, second in the nation behind Texas. Two private economic consultants, Chris Thornberg and Stephen Levy, said they think the reported payroll job gains are underestimating the level of hiring over the past year – by as much as 100,000 jobs.
“We’re doing good,” said Thornberg, of Beacon Economics consulting in Los Angeles. “California remains one of the fastest-growing economies out there.”
The EDD’s report came out as the U.S. Commerce Department said the nation’s economy grew at an annualized rate of 4.1 percent in the third quarter, a significant increase from the previous estimate of 3.6 percent. The news sent the Dow Jones average up 42.06 points, to a record 16,221.14. Earlier in the week, in another encouraging sign, the Federal Reserve said the economy is doing well enough that it will soon begin to taper off its bond-purchasing program, which has expanded the money supply.
Economists said the nation appeared to have pulled out of the late-summer doldrums. The Bureau of Labor Statistics said unemployment rates fell last month in 45 states plus Washington, D.C.
In California, November’s job gains were fairly broad based. Seven of the major categories added jobs, while four reported declines. The one negative note: October’s job gains, previously reported as 39,800, were revised downward to 30,100. But that figure “is still really positive,” Asmundson said.
Payroll statistics are usually considered a more reliable barometer than the unemployment rate. But when the economy is growing, the payroll surveys can’t keep up with the new companies sprouting, Thornberg said. “They underestimate job growth when there’s acceleration,” he said.
In greater Sacramento, the unemployment rate fell a tenth of a percentage point. The region gained 3,100 jobs. The biggest gainer was retail trade, which added 4,000 jobs, as shopkeepers got ready for the holidays.
While that was a seasonal gain, it’s notable that retail staffing in November was 1.4 percent higher than a year earlier, signifying increasing confidence in the economy. “That’s a pretty good indicator that retailers are expecting possibly a larger bump (in sales),” said George Marley, an EDD labor market consultant.
The health care industry also grew sharply, adding 700 jobs in November, continuing a growth trend that seems impervious to the ups and downs of the economy.
All told, the region has added 12,400 jobs in the past year, a 1.5 percent growth rate. That nearly matches the 1.6 percent growth in jobs statewide, suggesting the Sacramento area is beginning to catch up with the recovery in the rest of California.
Michael Bernick, a San Francisco labor lawyer and former EDD director, said the recovery has been choppy at times, “but what stands out is the near constant job gains each month for nearly three years.” He said, “The fundamentals in California remain in place” for continued job growth in 2014.
Still, the recovery is far from complete. California has added 903,000 jobs since the job market bottomed out in early 2010, according to the EDD. That’s about two-thirds of the jobs that were lost. The Sacramento area, whose recovery lagged the state, has regained perhaps 30 percent of its lost jobs. Sacramento had roughly 60,000 more payroll jobs six years ago, as the recession was getting underway.
Thornberg said the recovery is picking up “modest” momentum. “I don’t want to go crazy and imply everything’s fine,” he said. “Unemployment’s still higher than it should be. Foreclosures are still higher than they should be. But things are trending in the right direction.”
The EDD, though, repeated its warning that more than 220,000 unemployed Californians stand to lose their unemployment benefits Dec. 28 unless Congress acts to extend them.
The situation affects long-term unemployed Californians who have been receiving extended benefits. They represent about 14 percent of the nearly 1.6 million Californians who are unemployed.