April 20, 2018

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.

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April 2018 Report

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CALIFORNIA LOSES JOBS IN MARCH, BUT LONG TERM GROWTH TREND REMAINS STRONG

The latest jobs numbers show that the state lost 7,200 jobs in March, however, this represents a single-month departure from recent trends, according to an analysis released jointly by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development. Statewide job gains on a year-over-year basis remain overwhelmingly positive at 321,000 positions – a 1.9% gain over March 2017.

“We should not be overly alarmed by a one month drop in jobs because there is a lot of volatility in the monthly data,” said Robert Kleinhenz, Executive Director of Research at Beacon Economics and the Center for Forecasting. “In fact, the last monthly decline occurred in June 2016, a year that was one of the best for statewide job gains in the current upcycle. It is reassuring that the yearly numbers show steady job gains, particularly within California industries that have contributed job gains for several months running.”

The steady year-over-year growth across the state also puts California well ahead of the nation, where job growth came in at 1.5% from March 2017 to March 2018.

The state’s unemployment rate remained steady at 4.3% in March, maintaining its record low level. For the year, Household Employment has grown by 1.6% and the state’s labor force has expanded by a more modest 0.8%. With California’s labor market continuing to tighten, the labor force will need to expand at a faster rate in order to sustain the payroll growth rate experienced in recent years.

Key Findings:

Health Care contributed the most jobs in March, adding 4,200 jobs to its payrolls. With another month of steady gains, year-over-year growth in this sector now stands at 3.1%
Manufacturing added the second largest number of jobs last month, increasing its payrolls by 1,900 positions. Not far behind was the Transportation, Warehousing, and Utilities sector, which added 1,600 jobs to its payrolls during the month.
Other Services (-4,600) and Construction (-4,400) were responsible for the biggest declines during the month. However, despite this one-month dip, year-over-year job gains in Construction remain strongly positive, with the sector boosting payrolls by 6.8% from March 2017 to March 2018
Other sectors posting sizeable losses during the month were Retail Trade (-3,900), Financial Activities (-1,200), and Management (-1,100).
Regionally, growth was mostly negative. In Southern California, the Los Angeles (MD) -4,000 shed the most jobs, followed by Orange County (-2,700), the Inland Empire (-1,400) and San Diego (-900). From a full year perspective, growth remains positive, with the Inland Empire (+2.9%) leading the way, followed by San Diego (+1.7%), Orange County (+1.3%), and the Los Angeles (MD) (+1.1%).
In the San Francisco Bay Area, growth was also negative in most major metropolitan areas. While San Francisco (MD) added 100 jobs during the month, San Jose (-1,200) and the East Bay (-700) both shed positions. Year-over-year, however, growth remains positive, with San Jose (+2.6%) leading the way, followed by the East Bay (+1.7%) and San Francisco (MD) (+1.6%).
In the Central Valley, Modesto and Visalia each added 600 jobs during the month, while Sacramento (-2,300) and Bakersfield (-400) shed jobs. From a year-over-year perspective, Yuba (+3.7%), Madera (+3.5%), Stockton (+3.4%), Visalia (3.3%), and Fresno (+2.9%) have all added significantly to payrolls.

More Information

For information about any of the Center’s research services, please contact:

Director of Business Development Rick Smith at 951.827.2792 or rick.smith@ucr.edu or Deputy Director Sherif Hanna at 951.827.2792 or sherif.hanna@ucr.edu.