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California's jobs picture brightens

Payrolls in California grow by 33,900 in May, for a 10th consecutive month of gains, and the state's unemployment rate falls to 10.8%.

June 16, 2012|By Ricardo Lopez, Los Angeles Times
  • People have their resumes reviewed at a job fair in Anaheim. California has added 221,500 net jobs since May 2011, a gain of 1.6%.
People have their resumes reviewed at a job fair in Anaheim. California… (Jae C. Hong, Associated…)

California posted unexpectedly strong job growth in May, fueling hopes that the state's slow recovery will gain momentum as the summer tourism season kicks into gear.

Employers added 33,900 net jobs to payrolls last month, the largest monthly gain since February, according to data released Friday by the state Employment Development Department. In addition, April figures were revised upward to show a net gain of 1,300 positions instead of the 4,200 loss reported last month. That means California has gained jobs for 10 consecutive months.

May's performance helped push down the state unemployment rate to 10.8% from 10.9% in April.

The solid employment growth surprised many economists after a disappointing federal report earlier this month showed that the U.S. overall added only 69,000 jobs in May.

"Given what happened at the national level, this is a really impressive number for California," said Esmael Adibi, director of Chapman University's A. Gary Anderson Center for Economic Research. "California was underperforming the U.S. since the recession … [and] is now in catch-up mode. When you go down so deep, you come back stronger."

Eight sectors posted employment gains, led by leisure and hospitality, with a net gain of 13,200 jobs. Professional and business services and educational and health services also showed respectable increases, adding 10,500 positions each.

Three categories lost jobs, led by the government sector, which shed 3,300 jobs in May, followed by the trade, transportation and utilities sector and the other services sector.

California added 221,500 jobs since May 2011, a gain of 1.6%.

The best-performing sector in May, leisure and hospitality, suggests that consumers are once again spending on travel, entertainment and other things that aren't considered necessities, Adibi said.

"Consumers were very depressed during the recession. Now they're satisfying their pent-up demand," he said. "Once you gain a little confidence, people will buy a car, eat out, make a trip."

Another bright spot is the state's long-suffering housing market, which appears to have bottomed out. Data released this week by research firm DataQuick showed that statewide, home sales rose 17.6% since May 2011. The state's median home price rose to $270,000, up 2.3% from a month earlier and up 8.4% from a year earlier.

"Any improvement in the housing sector is going to ripple through a lot of sectors," said Dennis Meyers, principal economist for the state's Finance Department.

But economists cautioned that a number of factors could hamper California's recovery, including the state's budget woes, which Adibi said could affect government-sector employment. Legislators passed a $92.1-billion budget Friday, but many issues remain unresolved. For one, the state still needs to fill an $8-billion-plus budget hole.

Weakness abroad also could weigh on the state and nation. Greece's much-anticipated election Sunday could lead to that country's exit from the Eurozone. Meanwhile, economic growth is slowing in China, a major trading partner for California.

Despite the uncertainty, Stephen Levy, a senior economist with the Center for Continuing Study of the California Economy, said Friday's jobs report was encouraging.

"You don't want to make a huge deal, but it is a good month," Levy said.

But California still has a long way to go to gain back all of the jobs lost to the economic downturn. Its unemployment rate remains well above the national rate of 8.2%, and almost 2 million residents remain unemployed.

Among them is Carlos Alvarenga, 29, who used to work in merchandising.

He recently relocated from Reno to Long Beach, where he now lives with his parents. So far, his yearlong job search has proved fruitless.

"I'm hoping I can get a job soon. It's not easy," he said. "I haven't given up. It's kind of tough nowadays."

Regionally, Southern California saw widespread job gains.

Los Angeles County's unemployment rate fell to 11.4% from 11.6%, adding 11,800 jobs in May. The leisure and hospitality sector posted the biggest job gains: It added 9,100 positions, mainly in accommodation and food services.

Orange County added 5,900 jobs last month, 3,400 of them in leisure and hospitality, as employers ramped up payrolls in anticipation of the summer tourism season. On Friday, Disney's California Adventure theme park in Anaheim opened its $1.1-billion, 12-acre expansion dubbed Cars Land to much fanfare.

The Inland Empire also saw job gains: Employers added 3,100 net jobs to their payrolls, mainly in wholesale trade.

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