California employers spread holiday hiring cheer at the end of last year, adding a net 24,300 payroll jobs in December, the state said Friday in a report that reinforced views of solid economic growth.
The number of jobs added in November was revised sharply upward, and the December unemployment rate fell by 0.2 percentage point to 5.1%, the Employment Development Department reported.
"It was a great report.... We went into the new year with a good head of steam," said Howard Roth, chief economist for the state Department of Finance.
The latest numbers bucked subpar job creation in the rest of the country last month. That result fostered expectations that U.S. economic growth slowed in the fourth quarter from the strong pace of the July-toSeptember period.
Roth and some other economists, however, expect California to be challenged to match last year's pace of job growth.
Working against the state is a cooling residential real estate market. Home price gains have slowed from their sizzling jumps of the last two years. More homes are being put on the market, while sellers are enduring longer periods to move their properties.
Expectations of modest home equity gains could prompt Californians to rein in spending -- prompting employers in turn to be less exuberant in hiring.
On the positive side, service industries such as leisure and hospitality, education and healthcare are expected to post stronger job growth this year, Roth said.
That could offset at least some of the expected job declines in construction and other housing-related professions -- the state's main job engine last year.
"California is not a one-trick pony. There is solid growth in other sectors as well," said Sean M. Snaith, director of the business forecasting center at the University of the Pacific in Stockton. "Housing will not turn out be the Achilles' heel of this expansion."
In addition, some of the underpinnings of Southern California's economy -- including trade and tourism -- are expected to continue to perform well. At the same time, Northern California's rebound is expected to continue as heftier business spending on technology bolsters prospects for Silicon Valley employers.
"The Bay Area is back on its feet. That was a real hole in the doughnut for a number of years," said Steve Cochrane, regional economist at Moody's Economy .com in West Chester, Pa.
Workers also are expected to benefit from improving wage growth in coming months. The relatively low state and national jobless rates suggest a tightening labor market -- and more bargaining power for employees, Cochrane said. Better pay trends could help offset the negative effect of slowing home price growth on consumer confidence.
California's job growth in November was revised upward to 32,500 from the initial estimate of 20,400, the Employment Development Department said. The November gain was the strongest since the net 39,800 jobs added in August.
Hiring in November and December exceeded last year's average monthly job growth of 19,475. The figures for both months also surpassed the 17,000 to 18,000 net new jobs needed each month to keep up with growth in the state's labor force, economist Roth said.
The state's unemployment rate of 5.1% equaled the rate from September, which had been the lowest since May 2001. By contrast, the national jobless rate fell to 4.9% last month from 5% in November.
Job growth in California was spread across many industries as nine of the 11 employment categories tracked by the state posted hiring gains. Construction led the gainers, adding a net 6,600 positions last month -- suggesting that the expected slowdown in real-estate-related hiring had not kicked in.
Construction's boost was followed by net gains of 5,700 jobs in professional and business services, 3,200 in educational and health services, 2,400 in financial activities and 2,000 in manufacturing.
The decliners were led by leisure and hospitality, with a net loss of 600 positions, and trade, transportation and utilities, down 400.
Total nonfarm payroll employment in the state reached 14,879,200 last month, and the number of jobless fell 22,000 to 921,000.
Orange County continued to post Southern California's lowest unemployment rate, 3.2%, down sharply from 3.7% in November. Its strongest job gains came in retail trade as employers added staffing for the holiday shopping season.
Retail hiring also contributed to a net addition of 23,000 jobs in Los Angeles County. However, its seasonally adjusted jobless rate rose to 5.5% from 5.1% as the labor force increased by 44,000 -- presumably as more optimistic job seekers reentered the market.
Elsewhere in the Southland, San Bernardino, Riverside and Ventura counties all posted jobless rates of 4.3%, while San Diego County came in at 3.6%. Those numbers, along with Orange County's, were not seasonally adjusted.