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California jobs report: Expect modest growth in certain industries

August 15, 2013|By Shan Li
  • Economists expect to see modest growth in California jobs for the month of July. Above, Target hosts a job fair.
Economists expect to see modest growth in California jobs for the month… (David Paul Morris / Bloomberg )

California will report on Friday how the labor market fared in July.

Economists expect to see modest jumps in Golden State jobs for the month, but many are worried that the slowdown in job growth seen nationally in July could also be reflected in California.

The state unemployment rate stands at 8.5%, according to the Employment Development Department. Since the recovery began in February 2010, California has added 803,400 net new jobs.

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Things to watch out for in the report:

1. The Labor Department reported that the U.S. in total added 162,000 new jobs last month. Economists predict California could have contributed between 17,000 to 18,000 of those new positions. That's if the state grabbed its normal share -- about 10% -- of the country's total job growth.

However, California has actually been pulling more than its normal weight in national job creation and has outpaced the U.S. in growth. That means the number could jump higher -- but don't expect gangbuster numbers either, economists said.

2. The construction sector has been volatile, adding jobs one month and shedding them another. But the industry has outpaced all others in its rate of job growth over the past year, growing 5.5% and adding 32,300 net jobs.

Economists say that renewed construction may push contractors to continue bringing on workers as the housing industry recovers.

4. The leisure and hospitality sector has been one of the fastest-growing industries, especially as tourists surge back to the state's amusement parks, beaches and other attractions. The sector actually added the most jobs over the past year -- 70,800 net positions since June 2012.

Expect more low-wage jobs added at restaurants and bars, economists predict. Although this reflects increased consumer spending, it also means a bigger portion of Californians are working jobs that are often part-time and with low pay. 

3. Expect employers in the professional and business services sector, which includes white-collar occupations such as architects and lawyers, to continue expanding. This segment of the labor market has grown by 59,800 jobs in the past 12 months.

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Follow Shan Li on Twitter @ShanLi

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