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California gains jobs, led by trade and tourism

The state's 2% job market growth outpaces the national rate, with improvement in tech firms, tourism and even the battered construction industry.

July 21, 2012|By Ricardo Lopez, Los Angeles Times
  • A laborer works on a new home in Dublin, Calif. "Construction was our biggest major drag for a long time,” said economist Esmael Adibi. “But now we’re coming back stronger in terms of percentages.”
A laborer works on a new home in Dublin, Calif. "Construction was our… (David Paul Morris, Bloomberg )

While the nation's job engine sputters, California's is revving up, thanks to another month of solid employment growth with international trade and tourism leading the way.

Employers statewide added 38,300 net new jobs in June with gains in most industries, including construction and professional services, according to a report Friday by the state Employment Development Department.

"It's an impressive number," said Christopher Thornberg, founding principal at Beacon Economics, a Los Angeles consulting firm. "This is very surprising."

The increase in jobs helped push California's unemployment rate down in June to 10.7% from May's 10.8%. The state also revised May's jobs figure up, to 45,900 from the initial report of 33,900.

California's job market is growing faster than the nation's — 2% since last June compared to the national rate of 1.4% — in part, because the state had nowhere to go but up. The bursting of the housing bubble hurt it more than almost any state.

But California is showing renewed strength.

Silicon Valley, powered by such tech giants asGoogle Inc.,Apple Inc.andFacebook Inc., has added thousand of jobs and billions of wealth to the state's economy. Now Southern California is starting to regain its mojo.

Tourism has rebounded as visitors return to the state's beaches and theme parks. Healthcare continues to advance, even in a sluggish economy. White-collar jobs such as accounting, finance and legal services are starting to return.

Even the long-suffering construction industry is adding jobs as developers rush to build apartment units for a growing population that is no longer able to afford single-family houses.

"Construction was our biggest major drag for a long time," said Esmael Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University. "But now we're coming back stronger in terms of percentages."

Still, California's employment market is far from healed. The state lost more than 1 million jobs during the recession and has yet to recoup even half that. Nearly 2 million people remain unemployed. Discouraged workers continue to drop out of the workforce.

And economists fear that the state's recovery may falter if the national and the global economies continue to weaken. Looming ahead are the European debt crisis and the so-called fiscal cliff, the year-end expirations of several tax cuts and the prospect of automatic spending cuts.

Adding 38,300 California jobs "sounds like a nice number, and it is," said Sung Won Sohn, an economics professor at Cal State Channel Islands in Camarillo. "But I don't think that it's necessarily 'Happy Days Are Here Again.' "

He said that although the report was positive, the state needs to post at least 100,000 jobs a month for the recovery to kick into high gear.

For some job-seekers, permanent employment has proved to be elusive.

Sheyda Youssofia, a 28-year-old Hollywood resident, was at a state job site this week filling out a job application to work as a receptionist. In the last year, she has landed only temporary jobs through an agency and has felt discouraged by her prospects.

"I just feel that the office industry is not for me anymore," Youssofia said. "I'm maxed out" from filling out countless job applications and getting nowhere.

Unlike the nation, California's gains have been more broadly based. Last month, seven of 11 business sectors grew.

Friday's report also lends more support to evidence that the housing and rental markets are starting to turn around: The state added 8,100 construction jobs in June.

Since June 2011, the construction sector grew 5%, adding 27,200 jobs. But that pales compared to the number of construction jobs lost after the housing bust. The industry is still down 400,000 jobs from its peak of 945,100 in 2006.

Economists said that the recent growth in construction is mostly the result of demand for multi-unit homes. But some coastal areas also have begun seeing new single-home construction that is boosting employment.

The New Home Co., an Orange County builder, has residential projects planned for Santa Clarita, San Jose and Foster City, near San Mateo.

"We've been hiring quite a bit in the last year, but we're not done yet," said Tom Redwitz, the company's president. "The big idea is to start and grow the company as the market improves. Now the wind is moving at our back, not in our face."

The state has reaped the benefits of increased trade activity at its ports with employment in the trade, transportation and utilities industry rising 9,400 last month, the biggest gain in any single business sector.

That's "a very good sign," said Sohn, the economist. "We're having more import and export traffic. It's an important sign of the economy."

With the summer tourism season well underway, leisure and hospitality employers hired 9,200 more workers.

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