August 17, 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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August 2018 Report

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CALIFORNIA JOB GROWTH RAMPS UP AGAIN

Substantial gains in July and a revision of June’s low numbers have pushed California’s rate of job growth above the nation’s, according to an analysis released jointly by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development. The state added 46,700 jobs in July, the latest numbers from the California Employment Development Department. In addition, June’s numbers were revised upward, increasing from a paltry 800 jobs in the preliminary release to 21,500 jobs in the latest estimates. These gains have helped push the state’s job growth rate to 2.0%, just ahead of the nation overall (1.6%).

California’s unemployment rate held steady at 4.2% in July. However, labor force growth continues to disappoint. From July 2017 to July 2018, the state’s labor force expanded by just 16,900 (0.1%). This tepid pace of growth is making it difficult for employers to attract the talent they need to grow their businesses and will make it difficult for California to sustain the growth levels it has enjoyed in recent years.

“The July numbers and June revision show that the statewide economy and its industries remain on a steady course,” said Robert Kleinhenz, Executive Director of Research at Beacon Economics and the Center for Forecasting. “In yearly terms, overall job gains from January through July of this year were marginally less than during the same seven-month period a year earlier, with nearly every industry in the state contributing to those gains. The ongoing concern is that statewide growth is hemmed in by paltry increases in the labor force.”

Key Findings:

At the industry level employment growth was largely positive in the latest numbers. The Administrative Support sector added the most jobs, increasing payrolls by 13,600 positions. This helped push year-over-year gains for the sector to 25,100 positions, which is equivalent to a 2.3% year-over-year growth rate.
Other sectors adding a significant number of jobs during the month were Leisure and Hospitality (+9,500), Wholesale Trade (+5,100) Information (+4,700), and Health Care (+3,400). From July 2017 to July 2018, payrolls have grown by 58,000 (3.0%) in Leisure and Hospitality, by 3,400 (0.5%) in Wholesale Trade, by 15,300 (2.9%) in Information, and by 58,000 (2.5%) in Health Care.
The sector posting the largest decline this month was Real Estate, which shed 2,200 positions. Despite this one-month decline, from a year-over-year perspective this sector has added 700 positions, a 0.2% increase from July 2017 to July 2018. The only other sector shedding a significant number of jobs during the month was Construction, which declined by 1,700 positions. Even so, growth in Construction remains overwhelming positive from a year-over-year perspective, with the sector adding 38,500 positions (4.7%) over the past 12 months.
Regionally, growth was mostly positive in July. In Southern California, the Los Angeles (MD) (+7,300), the Inland Empire (+6,700), and Orange County (+5,400) added jobs; while San Diego (-2,800) shed positions. From a year-over-year perspective, the Inland Empire (+3.4%), San Diego (+1.4%), Orange County (1.1%) and the Los Angeles (MD) (+1.1%) have all grown steadily.
In the San Francisco Bay Area, San Jose (+4,800) and the San Francisco (MD) (+2,000) added a significant number of jobs. From a year-over-year perspective, San Jose (+3.2%), San Francisco (MD) (+1.8%), and the East Bay (+1.6%) have all increased payrolls.
Growth was also largely positive in the Central Valley, with Sacramento (+4,900), Merced (+900), and Stockton-Lodi (+800) leading job gains, and Bakersfield (-900) shedding the most positions. From a year-over-year perspective, Merced (5.4%), Stockton-Lodi (3.1%), Chico (2.8%), Madera (2.7%), and Fresno (2.7%) have all posted strong gains.
On the Central Coast, job growth was led by Salinas (3.0%) and Santa Cruz (2.4%).

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.