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California jobs report: Expect more jobs -- in certain industries

June 20, 2013|By Ricardo Lopez
  • Expect the construction sector to continue its hiring surge when California issues its jobs report Friday. Above, contractors work on home construction in San Ramon, Calif., this month.
Expect the construction sector to continue its hiring surge when California… (David Paul Morris / Bloomberg )

California will report Friday how the labor market fared in May. Economists expect the California jobs report to show modest growth, but they will be watching a few key industries that will signal whether the recovery is still on track. 

The state unemployment rate stands at 9%, according to the Employment Development Department. Since the recovery began in February 2010, state payrolls have grown by about 757,000 net jobs, according to the latest government figures.

Here are six things to expect from Friday's jobs report:

1. Economists predict that the state will have added between 17,000 and 20,000 net jobs in May -- that's if California nabs its share (roughly 10%) of the U.S. job gains. Last month, the Department of Labor reported that the U.S. gained 175,000 jobs.

That figure could edge higher considering California has outpaced the U.S. in terms of job growth. Don't be surprised if the figure jumps to 30,000, which would be a solid gain but nothing spectacular, economists said.

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2. The construction sector, which has outpaced all other industries in its rate of growth since April 2012, should add a few thousand jobs in May. In the last year, employers in this industry have added nearly 45,000 jobs, trailing only professional and business services and the leisure and hospitality industries in sheer numbers.

Economists point to housing start figures as evidence that contractors will continue hiring laborers and skilled trades workers as demand for new homes keeps rising.

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 added the most jobs over the last year -- 71,500 to be exact.

4. California is blessed with nearly 850 miles of coastline, world-famous amusement parks and other attractions. Both domestic and international tourists have flocked to the Golden State, as evidenced by increased air traffic to California airports. The leisure and hospitality sector has been one of the fastest-growing industries, adding nearly 63,000 jobs since April 2012.

Expect more jobs added at restaurants and bars, economists predict. With a recovering labor market, more consumers are cracking open their wallets and dining out, fueling job growth.

5. While other sectors have grown in the last year, state and local governments have continued shedding jobs. That shouldn't change Friday.

Over the year, government payrolls are down 0.1%. Though sales tax revenue has slowly returned, economist predict that the public sector is still a long way from hiring as city and state budgets remain lean.

6. Is the recovery taking hold inland? Economists have long said California has a bifurcated recovery. In layman's terms, that means coastal regions have seen jobless rates fall faster than the Central Valley and the Inland Empire, which suffered mightily during the downturn. If Friday's report shows that areas such as Riverside and Stockton have added jobs, it could mean the recovery is beginning to take hold there.


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