Executive Summary:
- According to the latest numbers from the California Employment Development Department, the state added 19,300 jobs in March, which is one in five positions that were created nationwide.
- California’s job growth continues at a steady pace. With a 4.9 percent unemployment rate, the state’s jobless claims are the lowest since December 2006. Keep in mind that slowing job growth is normal at this point in the economic cycle given that the state has reached full employment. Year-over-year job growth ticked up to 2.1 percent in March, from February’s five-month low. California has added more jobs than any other state, outperforming Texas and Florida by about 100,000 positions since March 2016.
- Construction job growth was the state’s bright star in March, adding 18,900 jobs, the largest monthly increase in the sector since 1997. However, drier March conditions helped boost job numbers.
- Other sectors that added jobs were government (6,300), leisure and hospitality (4,700), and education and health services (4,300). Manufacturing added fewer jobs — 1,700 — but that is still a positive trend. By contrast, sectors that lost jobs were trade, transportation, and utilities; financial activities; and professional and business services. The professional and business services sector accounts for many tech jobs, which have seen much monthly variation. Nevertheless, for as many job losses in the tech sector there were many job additions elsewhere.
- Anecdotally, arguments have been made that tech firms are leaving California for Texas and the Southeastern U.S. However, an analysis of the U.S. Census Bureau’s American Community Survey shows that when examining out-migration patterns by income, in-migration is positive for people earning $100,000 or more annually. Among people who earn less than that, there are more people moving out of the state than moving in. In other words, California’s high cost of living in is driving lower-income people out of the state, while jobs and population among higher-income groups continues to increase.
- In the Bay Area, the monthly jobs picture was largely positive. The East Bay added the most jobs in the state — 9,900. San Jose added 3,000 jobs and San Francisco added 200 jobs while Santa Rosa lost 1,500 jobs. Employment in Los Angeles fell by 9,300 jobs in March.
- On an annual basis, all Bay Area metropolitan regions and Los Angeles showed notable increases in new jobs over the last year. Figure 1 summarizes the increases by region.
Figure 1:
Source: California Employment Development Department
Selma Hepp is Pacific Union’s Chief Economist and Vice President of Business Intelligence. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.
(Promotional photo: iStock/SolStock)