March 8, 2019
Beacon Employment Report
Presented by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development
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. Click here to learn more about why seasonal adjustment is critical to revealing accurate trends and insights within data. The analysis is a sample of the kind of research available from the UC Riverside School of Business Center for Economic Forecasting and Development.
CALIFORNIA EMPLOYMENT SEES WEAKER GAINS IN FIRST MONTH OF 2019; ANNUAL REVISION SHOW MOST STATE INDUSTRIES REMAIN ON TRACK
This report released jointly by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development includes analysis and commentary on both the January employment numbers and the annual benchmark revision from the California Employment Development Department (EDD).
California began 2019 with a weaker than normal monthly gain in January, increasing payrolls by 3,000 in the latest numbers from the California EDD. The yearly pace of growth slowed as well, with the state adding 246,400 jobs from January 2018 to January 2019, an increase of 1.4%. This represents a slightly slower rate of growth than in December 2018 when jobs increased by a revised 1.6% year-over-year, and is behind the national growth rate of 1.9% year-over-year.
California’s unemployment rate inched up to 4.2% in January, a 0.1 percentage point increase from December. However, the driving force behind this increase was an uptick in the state’s labor force, which grew by 50,200 during the month. In yearly terms, the labor force grew by 1.5%, continuing an accelerating trend that began in mid-2018.
”California began 2019 much as it ended 2018, with the unemployment rate in record low territory and industry job gains that have been led by health care, professional and business services, and leisure and hospitality,” said Robert Kleinhenz, Executive Director of Research at Beacon Economics and the UCR Center for Forecasting. “Looking through the rest of the year, signs point toward continued growth at the state level, with most of California’s regions remaining on track as compared to last year.”
Annual Benchmark Revision
The annual benchmark revision from the California EDD did not change top-level growth. From 2017 to 2018, year-over-year growth averaged 2.0% before and after the revisions. However, there were more payroll positions in 2017 and 2018 than previously estimated, with average monthly employment levels 53,600 higher in the revised figures.
At the industry level, the benchmark revision was mixed, with some sectors seeing growth rates rise and others seeing their growth rates revised downward. The largest increases in year-over-year growth rates from 2017 to 2018 occurred in Mining and Logging (0.3% original to 3.9% revised), Management (0.6% original to 3.2% revised), Other Services (-0.2% original to 1.3% revised), Logistics (3.7% original to 4.9% revised), Real Estate (1.5% original to 2.4% revised), and Manufacturing (0.5% original to 1.2% revised).
The largest declines in year-over-year growth rates from 2017 to 2018 were in Leisure and Hospitality (2.7% original to 1.7% revised), Retail Trade (0.5% original to -0.1% revised), Finance and Insurance (0.1% original to -0.4% revised), Government (1.2% original to 0.9% revised), and Educational Services (3.5% original to 3.1% revised).
The EDD’s annual benchmark revision was also mixed at the metro level, with some areas seeing significant gains in their growth rates and others experiencing declines compared to earlier estimates. The largest increases in year-over-year growth rates from 2017 to 2018 were in Hanford (0.8% original to 3.0% revised), Napa (0.3% original to 2.3% revised), Sacramento (1.8% original to 3.1% revised), San Francisco (MD) (1.9% original to 3.1% revised), and Orange County (1.0% original to 1.9% revised).
The largest declines in year-over-year growth rates from 2017 to 2018 were in Merced (3.9% original to 1.4% revised), Santa Cruz (2.5% original to 0.6% revised), Visalia (2.4% original to 0.9% revised), San Jose (3.3% original to 1.9% revised), and San Rafael (MD) (1.9% original to 0.8% revised).