California employers added a net 4,900 jobs in September, the Employment Development Department reported Monday, in a modest showing that suggested the state was having trouble revving its economic recovery into higher gear.
The increase followed a revised gain of 4,300 net nonfarm jobs in August and a net loss of 9,300 in July, making September the third straight month of sluggish job creation after four consecutive months of solid growth.
"The labor market just doesn't have much 'oomph' right now," said Joseph Hurd, senior economist with the UCLA Anderson Forecast.
September's unemployment rate of 5.9% was unchanged from the revised figure for August, and down from 6.7% a year ago, the EDD said. The national jobless rate stood at 5.4% last month.
The latest job report at least showed that California's recovery was sustainable, economists said. It just doesn't yet have the steam to generate jobs as it did between March and June, when a net 89,500 payroll positions were added.
After showing signs earlier this year of beginning to outpace the nation in job formation, the state engine is now sputtering worse than the country's.
Based on its 11% share of total U.S. employment, California should have generated more than 10,000 jobs in September, when the nation gained a weaker-than-expected 96,000 positions, Hurd said.
Several factors might be hindering the Golden State's employment growth: Motorists have been hit relatively hard by surging gasoline prices, and ongoing budget woes have stifled government employment, which fell by 7,100 jobs in September.
What's more, the technology sector is adding jobs slowly as it continues to struggle to recover from the dot-com bust. High workers' compensation and health benefit costs, and uncertainty about propositions on the state ballot that could increase business expenses, are discouraging employers.
The September numbers won't make a difference in California's role in the looming presidential election, with Democratic candidate Sen. John F. Kerry expected to easily win the state's popular vote. But the sluggish pace of job creation suggests further political and economic challenges facing Gov. Arnold Schwarzenegger, who came into office last year pledging to improve the state's business climate and jump-start job creation.
In September, the largest growth came from professional and business services, particularly temporary workers -- suggesting continued reluctance to hire permanent employees, said Brad Williams, director of budget overview and fiscal forecasting for the California Legislative Analyst's Office.
That reluctance also was illustrated in the much stronger showing of the EDD's household survey, Williams said. It posted a gain of 37,000 jobs in September, versus the 4,900 of the much more extensive payroll survey.
The household survey samples people reached at home and thus includes independent contractors and other self-employed workers who don't receive employer-paid healthcare and other benefits. The household survey also includes recently formed small businesses that aren't established enough to be included in the payroll survey.
Another key factor inhibiting hiring is labor-saving technologies and business practices that boost worker productivity. That explains why personal incomes and corporate profits in California are growing much faster than jobs, economists said, because higher productivity tends to boost wages and profits.
"As people get paid more, it's a good sign they are getting more productive," said Dennis Meyers, principal economist at the state Department of Finance.
The latest job report contained some positives. Private-sector job growth outpaced the nation's, thanks to the state's diverse economic base, Meyers said. Also, he said, the Bay Area showed its first year-over-year gain in jobs since May 2001, when it was mired in Silicon Valley's tech crash.
"That's a pretty good sign they are climbing out of the hole," Meyers said, noting strong gains in exports of computers and other high-tech equipment.
Aerospace and construction showed strength, good signs particularly for Southern California, said Steve Cochrane, director of regional economics for Economy.com in West Chester, Pa.
Several Southland counties continued to post relatively lower jobless rates, including Orange at 3.2%, San Diego at 3.8%, Ventura at 5.1%, Santa Barbara at 3.4% and San Bernardino at 5.2%. Riverside and Los Angeles counties came in at 6.1% and 6.2%, respectively.
Five of the state's 11 job categories showed gains, led by professional and business services at 18,800. Also growing were natural resources and mining; construction; trade, transportation and utilities; and financial activities.
Information posted the largest decline, down by 8,300 jobs. That was followed by government; educational and health services; manufacturing; leisure and hospitality; and other services.