March 22, 2019
Beacon Employment Report
Presented by Beacon Economics
Welcome to the Beacon Employment Report, a unique analysis of California’s employment numbers and trends. Each month, we link our own econometric predictions to data released by the U.S. Bureau of Labor Statistics and the California Employment Development Department to identify important changes in employment across industries and regions. The Beacon Employment Report is also one of the few analyses that uses seasonally adjusted numbers, which are critical to revealing accurate trends and insights within data. The analysis is a sample of the kind of research available from Beacon Economics.
CALIFORNIA JOB GROWTH CONTINUES SLOWDOWN
State Labor Force Accelerates; Unemployment Rate Remains Steady
Nonfarm job growth in California continued its slowdown in the latest numbers from the Economic Development Department (EDD), according to an analysis released jointly by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development. Nonfarm payrolls in the state expanded by 14,600 in February, about 9,000 less than the average across all of last year. However, January’s monthly gain was revised up from 3,000 to 5,900, nearly double the initial estimate. This upward revision was expected.
In yearly terms, California added 222,500 jobs, the second largest gain among the states after Texas. This was equivalent to a 1.3% yearly increase, which was half of the pace February 2018 (2.6%) and the slowest year-over-year gain since December 2011 (1.3%).
The California labor market held steady with an unemployment rate of 4.2%; the rate has remained virtually unchanged over the past twelve months. However, labor force growth accelerated again, now up 1.6% year-over-year from 1.5% year-over-year in January and 0.7% one year ago. The state’s labor force has increased by an average of 37,000 over the last two months. With job gains averaging about 23,000 per month, expect the unemployment rate to remain close to 4.2% for the foreseeable future.
“California’s labor market is essentially at full-employment, and has been for most of the past year,” said Robert Kleinhenz, Executive Director of Research at Beacon Economics and the Center for Forecasting. “That may account in part for the slower pace of job growth so far this year, but you also have to look at the individual sectors of the economy and their current circumstances.”