September State and Local Employment Report

The Employment Development Department (EDD) released the state and local employment reports for the month of September. Total California nonfarm employment increased by 8,200 jobs over the month in seasonally adjusted (SA) terms following a gain of 42,000 jobs in August.

The year-over-year change showed an increase of 444,300 jobs (SA). This equated to a growth rate of 2.8%, which exceeded the national increase of 2.1%, but was the slowest rate of increase since September 2012 when it was 2.5%. California’s private sector added 405,600 jobs (an increase of 3.0% over the year), while employment in the public sector rose by 1.6% (38,700 jobs).

While industry employment trends have been consistent for several months, job growth in California mirrored the slowdown seen in the September national numbers. Nine of the 11 super-sectors added jobs over the year to September: construction; trade, transportation and utilities; information; financial activities; professional and business services; educational and health services; leisure and hospitality; other services; and government for a combined gain of 451,000 jobs. Professional and business services posted the largest gain on a numerical basis, adding 130,200 jobs (up by 5.3%), while construction claimed the largest gain in percentage terms, increasing by 6.4% or 43,900 jobs.

Two sectors recorded a decline over the year in September. Mining and logging plunged by 10.1% for a loss of 3,200 jobs; manufacturing employment fell by 3,500 jobs (-0.3%).

California’s unemployment rate declined from 6.1% in August to 5.9% in September and was down from the year ago rate of 7.3%. This was the first time California’s unemployment rate dropped below 6.0% since November 2007. The civilian labor force was down over the month (-0.2%), but increased over the year by 0.8%. That’s equivalent to 143,700 new entrants to the labor force.

County highlights:

(Note: With the exception of the Los Angeles unemployment rate, county level numbers are not seasonally adjusted, which means there can be large month-to-month fluctuations in job counts. A truer picture of how local labor markets are faring is revealed by focusing on the year-over-year numbers. Annual trends “correct” for the seasonal factors that influence certain industry sectors over the course of the year.)

In Los Angeles County, the seasonally adjusted unemployment rate was 6.5%, down from 6.9% in August and below the year ago rate of 8.1%. Total nonfarm employment increased by 39,900 jobs. With the summer ending and a new school year beginning, 44% of last month’s job gain was in local education. Over the year, employment in Los Angeles County was up by 85,000 jobs, an increase of 2.0%.

Education and health services posed the largest year-over-year gain in employment in September with a net increase of 25,200 jobs. The health care industry added 24,100 jobs, while private education employment increased by 1,100 jobs.

Also recording significant jobs gains were leisure and hospitality, up by 19,400 jobs, and professional, scientific and technical services, up by 8,100 jobs.

Four major industry sectors reported year-over-year declines in September. Mining and logging lost 200 jobs, manufacturing was down by 1,200 jobs, finance and insurance posted a decline of 2,200 jobs, and information was down by 2,500 jobs.

In September, the unemployment rate in Orange County was 4.0%, down from 4.5% in August and below the year-ago figure of 5.3%. Nonfarm payroll jobs increased by by 3,400 over the month and were up by 44,900 over the year (an increase of 3.0%).

In the Riverside-San Bernardino area, the unemployment rate in September was 6.1% compared with 6.8% in August and below the year ago rate of 7.8%. The Inland Empire gained 3,500 nonfarm payroll jobs over the month and 36,300 over the year. This represented an increase of 2.8%.

In Ventura County, the unemployment rate was 5.3%, down from the year ago estimate of 6.6%. Total nonfarm employment was up over the month by 2,400 jobs and up over the year by 4,400 jobs (1.5%).

 Summary: Employment growth in California slowed in September, mirroring the slower pace of job growth that occurred at the national level. However, California continues to add jobs at a faster rate than the nation. It is generally best not to read too much into one month – we could see an upward revision next month. It is difficult to determine if the labor markets have simply hit a soft patch or if this is the start of a longer trend. In any case, the LAEDC expects to see job growth slow as we move into 2016, which reflects an economy in a mid- to late-cycle expansion. (Kimberly Ritter-Martinez)

Sources:  http://www.labormarketinfo.edd.ca.gov/