California unemployment down to 7.4 percent; Sacramento area up to 6.9 percent
07/18/2014 8:34 AM
08/12/2014 7:07 AM
It took California a little more than two years to lose 1.3 million jobs when the recession hit. It took a lot longer to gain them all back.
The state’s arduous climb out of the recession has hit a milestone: California now has slightly more jobs than it did seven years ago, before the housing market crashed and employment went into a tailspin. Employers across the state hired 24,200 workers in June, pushing payrolls past the previous peak reached in July 2007, according to figures released Friday by the state Employment Development Department.
“It’s good news,” said Irena Asmundson, chief economist at the state Department of Finance. “It’s really been almost seven years since we had this many jobs.”
That doesn’t mean the job market is fully recovered. Unemployment stood at 7.4 percent in June, down two-tenths of a point from May but still well above the 5.4 percent recorded seven years ago. The reason is that population growth has left more Californians unemployed despite the improvement in payrolls.
“We still have a ways to go,” Asmundson said.
In addition, the makeup of the job market has changed substantially. In many cases, full-time work has been replaced by part-time jobs or temporary “project-based” work in which employees are hired for a set period of time, said Michael Bernick, a San Francisco lawyer and employment consultant.
The shift to part-time and project work comes because many companies remain hesitant about taking on big payroll commitments despite the improved economy.
“Employers are reluctant to bring people on,” said Bernick, a former EDD director.
National statistics support this argument. The nationwide unemployment rate is 6.1 percent. That nearly doubles with the inclusion of people who want full-time work but can only get part-time jobs, as well as those who aren’t looking for jobs but say they want work.
Still, the overall job growth has been solid. California is adding jobs at a 2.4 percent rate annually, one of the highest growth rates in the country.
“After a long and deep recession, the state has outpaced the nation in recovery for four straight years and is building on that record in 2014,” said Stephen Levy, director of the Center of Continuing Study of the California Economy, in a note to reporters.
June’s 24,200 new jobs followed a gain of 18,900 jobs a month earlier.
The comeback certainly hasn’t been swift. Between July 2007 and February 2010, when the economy hit bottom, California payrolls shrank from 15.45 million jobs to 14.12 million. More than four years later, the state finally surpassed the 2007 level and reached a new high of 15.47 million payroll jobs in June.
“We lost them much faster than we recovered,” Asmundson said.
The Sacramento unemployment statistics show the recovery continuing. The region’s unemployment rate increased two-tenths of a percent in June, to 6.9 percent, even though employers added 8,400 jobs.
The explanation: Employers were hiring, but not in high enough numbers to accommodate all of the students and recent graduates flooding the job market.
“Kids graduating college, now they’re in the labor force,” said EDD labor market consultant George Marley. “They’re hitting the pavement, looking for work.”
Overall, he said, the job picture continues to brighten. The region has added 22,500 jobs in the past 12 months, a robust 2.6 percent growth rate.
“We’re definitely trending in a good direction,” Marley said.
For instance, the Sacramento region’s leisure and hospitality industry, which includes restaurants and movie theaters, added 3,800 jobs in June, the most of any sector of the economy. The average job growth in June for that industry the past 10 years has been 1,600, he said.
In the past year, California has added 356,400 jobs, second only to Texas. Despite its economic progress, California was still tied with Washington, D.C., for the fourth-highest U.S. unemployment rate in June. Only Rhode Island (7.9), Nevada (7.7) and Michigan (7.5) had worse unemployment rates.
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