Year-over-year Merced unemployment improves in January

The rate of Merced County unemployment improved in January compared with the same time a year earlier, while labor force numbers remained steady, labor market analysts said Friday.

January’s 12.8 percent jobless was down from 14.2 percent in January 2015, according to the state Employment Development Department. The labor force, which measures both the employed and people searching for employment, was 114,200 in the county in January, the same number as one year ago.

Month to month, however, the number of unemployed rose between December and January, up from the revised figure of 11.8 percent, the Employment Development Department reported.

Though Merced County’s numbers improved year over year, it still has the fourth-highest rate in the state, behind Plumas, Imperial and Colusa counties.

Merced showed strong gains in manufacturing, adding 1,400 jobs during the past year, for a total of 9,700. “That’s the highest since 2005,” said Diane Patterson, a labor market analyst with EDD in Sacramento. “That’s a good sign that manufacturing’s looking up and it’s been steadily growing.”

Other Central Valley counties have seen improvements in manufacturing, but Merced’s has continued to grow at a faster rate, though it does have a smaller sector to begin with than a county like Fresno.

There were also gains of 100 to 300 jobs in the mining, education and government sectors in Merced when comparing year-to-year rates. Only two sectors – trade and business services – had fewer jobs in January than in the same month last year.

Patterson said it’s typical for Merced to lose jobs between December and January, but the 1,200 government jobs lost were higher than the average trend. EDD did not have sufficient information to account for the larger-than-normal loss, she said.

Many economists say year-over-year comparisons are more reliable, and Merced’s unemployment rate has declined markedly in that time. Month-to-month comparisons are more likely affected by seasonality, Patterson said.

A number of staffers from Merced County cities this week reported increasing interest in home development, an industry often looked at as a bellwether for the economy as a whole. Building houses creates jobs and improves consumer confidence, experts said.

“That’s the engine that keeps it going,” Los Banos senior planner Stacy Souza Elms said. “It’s definitely picking up for us.”

Across Fresno, Kings, Madera, Merced and Tulare counties, the number of people out of work amounted to 99,300. That’s a decline of almost 12 percent from the estimated regional unemployment of nearly 113,000 in January 2015. Total employment rose by about 1.7 percent, from 768,800 in the first month of 2015 to almost 782,000 this January.

Despite the year-over-year improvement, unemployment rates across the Valley remain stubbornly and significantly higher than either the state or national rates. California’s unemployment rate was estimated at 5.7 percent, down slightly from 5.9 percent in December. The national rate also dipped slightly, from 5 percent in December to 4.9 percent in January.

Merced has some economic drivers it can look to for future job growth, such as UC Merced, according to Jeff Michael, director of the Center for Business and Policy Research at Stockton’s University of the Pacific.

“(UC Merced) certainly has been a big factor in the area’s economy in the past five or 10 years,” Michael said recently. “The expansion plans out to 2020 will represent a significant investment and a lot of jobs for the Merced community.”

The university looks to almost double the size of campus and make room for 10,000 students, pouring an estimated $1.9 billion into the regional economy and creating 10,800 construction jobs, university officials say.

Statewide non-farm payroll jobs, considered one of the key barometers of economic health, declined by 1,500 compared with December.

Despite the one-month drop in payrolls, California has seen some of the strongest job growth in the country in the past year. The state has added 444,900 jobs since January 2015, a growth rate of 2.8 percent.

Neither the official unemployment rate nor the estimated number of jobless workers include people who are not counted in the labor force, including students, retirees or people who have given up their search for work – also known as “discouraged workers.”

This story was originally published March 4, 2016 at 11:37 AM with the headline "Year-over-year Merced unemployment improves in January."