March 7, 2014

Recount shows strong job growth in California

California’s job market stuttered in January, but a just-completed recount of years past suggests the economic recovery has been stronger than previously believed – healthy enough, in fact, to erase most of the job loss from the recession.

California’s job market stuttered in January, but a just-completed recount of years past suggests the economic recovery has been stronger than previously believed – healthy enough, in fact, to erase most of the job loss from the recession.

The U.S. economy also reported better-than-expected job results for February, even though the national unemployment rate edged up to 6.7 percent.

All in all, a blizzard of new jobs data released Friday in Washington, D.C., and Sacramento showed the national and state economies continuing pretty much on the same recovery path they’ve followed since the recession ended. The numbers suggested generally steady growth but nothing spectacular. The same was true for the Sacramento regional economy.

“We’re not seeing any dramatic job gains or any dramatic job loss,” said Michael Bernick, a San Francisco labor lawyer and job-market analyst. “It’s likely in 2014 we’ll see the same.”

In California, unemployment fell to 8.1 percent in January, down from 8.3 percent, the Employment Development Department said. However, payrolls actually fell by 31,600 during the month. The two figures are based on different surveys and sometimes don’t move in the same direction; the payroll numbers are considered more reliable.

The EDD said Sacramento’s unemployment rate jumped to 8.3 percent in January, up from 7.5 percent in December. Payroll jobs declined by 11,600.

Economists said the lackluster January results for the state and Sacramento were more of a hiccup than anything else, and they said seasonal factors played a significant role. Retailers cut back after the holiday hiring season ended, and construction firms went into their usual winter hibernation.

Additionally, lack of snowfall in the Sierra in January may have hurt Sacramento’s job numbers. The leisure and hospitality sector, which includes the Sierra ski resorts, shrank slightly in January instead of taking on new workers.

“The drought, the lack of snow is showing up in the data a little bit,” said economist Jeff Michael of the University of the Pacific.

Beyond the January results, economists pointed with some enthusiasm to the annual revision of previous years’ data. That revealed more than 500,000 additional jobs statewide that hadn’t shown up in the payroll statistics until now.

With the revision, the state has now regained more than 80 percent of the roughly 1.4 million jobs that disappeared during the recession.

“It now looks like we have a whole bunch of jobs we didn’t have previously,” said Irena Asmundson, chief economist at the state Department of Finance. The new head count is “a better reflection” of the economy’s post-recession strength, she said.

She said the key factor was the inclusion of home-health care workers for the first time. Previously, their jobs didn’t appear in the payroll data because of privacy reasons, she said, although they did turn up in the calculation of the unemployment rate.

The new numbers also reflect the continued strength in the health care industry overall, which has been a growing business even as other sectors of the economy have faltered in recent years.

“There’s definitely a constant need,” said Ken Erman, owner of Rx Staffing & Home Care in Sacramento. His business has grown more than 15 percent in the past year.

The job recount spotlighted strength in other economic sectors, too. In Sacramento, for instance, the construction industry picked up about 7,000 jobs that hadn’t been showing up in the payroll figures even though there was ample evidence that construction activity was perking up in the region.

“As an economist, the data looks more realistic,” said Michael, director of UOP’s Business Forecasting Center.

Economist Stephen Levy of the Center for Continuing Study of the California Economy said the revision provides further evidence that the California recovery has finally spread from the coastal cities to inland markets.

Fresno’s job growth in 2013 hit 4.1 percent, while Modesto’s was 3.1 percent and Sacramento’s was 2.3 percent.

Sacramento’s economy has been helped by vast improvement in the state budget picture. State government has added 4,100 jobs in the region since last January.

Other industries made gains as well. SARTA, the Sacramento Regional Technology Alliance, reported Friday that the area’s medical-technology sector added more than 1,000 jobs in 2013. That represented a 20 percent increase.

On the national level, the data for February showed employment strength in spite of wintry weather across much of the country. Employers added 175,000 jobs, an improvement over the 150,000 projected by economists. Unemployment edged up to 6.7 percent, an increase of a tenth of a percentage point, in part because more Americans entered the labor force.

The monthly job increase came after two months of job losses. The report “bodes well for job and income gains in the months ahead,” said economist Scott Anderson of Bank of the West, in a memo to reporters.

“After the deep freeze during the past couple of months, a bit of thaw appeared in the economy,” said Sung Won Sohn, economist at California State University, Channel Islands. “Businesses were less affected by the weather in February than they were in January. Consumers trudged through the cold and snow to get some fresh air.”

James Furman, chief of the White House Council of Economic Advisers, wrote on his blog that the February report would have been stronger if not for hundreds of thousands of employees forced to reduce their hours or miss work altogether because of bad weather.

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