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California's unemployment rate drops to 9%

May 17, 2013|By Alana Semuels
  • A job fair on April 30 in Walnut Creek, Calif.
A job fair on April 30 in Walnut Creek, Calif. (Justin Sullivan / Getty…)

California’s pace of job creation slowed in April, as employers added 10,300 jobs in April, nevertheless pushing the state’s unemployment rate down to 9% from 9.4% the month before.

Employers had added twice as many jobs in March as they did in April. They slowed job creation in nearly every sector, including government, financial activities and trade, according to data released Friday morning by the Bureau of Labor Statistics.

It’s possible that continued uncertainty in Washington, coupled with the effects of the sequester and an expiration of payroll tax cuts is keeping employers’ expectations tempered, said Sung Won Sohn, an economist at Cal State Channel Islands.

“If they have confidence, then they will be ready to hire people,” he said about employers. “The biggest concern is Washington, which is spewing out so much uncertainty that it is dampening confidence and economic growth.”

Quiz: How much do you know about California's economy?

Another worrying figure: 5,500. That’s the number of people in California who dropped out of the labor force in April, either retiring or giving up looking for work. Around 139,000 people in California have dropped out of the labor force in the past year. Some go on disability rolls, Sohn said, others lose their jobs to the machines that employers are buying to increase productivity, and some retire.

Labor force dropouts are the reason the unemployment rate was able to drop so precipitously even though employers did not add very many jobs.

Still, in national standings, California is not one of the three states with the highest unemployment in the nation. That honor goes to Nevada, with an unemployment rate in April of 9.6%, Illinois, where 9.3% of the labor force is unemployed, and Mississippi, which has an unemployment rate of 9.1%.

But California, the most populous state in the union, lagged behind other big U.S. states in job creation in April. New York, which has roughly half as many people as California, added 25,300 jobs, while Texas added 33,100. Texas also outpaced California in job creation over the year, adding 326,100 jobs to California’s 273,000.

State budget cuts and the effects of the federal sequester aren’t likely to jump-start the economy any time soon. This week, for instance, California’s Employment Development Department announced it would answer its jobless call center only until noon, assigning workers to other tasks in the afternoon because of federal budget cuts. The state also cut jobless benefits last month.

Construction was one of the few bright spots in the job market in the state in April, contributing 7,400 jobs as demand continues to drive a building boom.

And businesses in the state can look forward to the summer, when industries such as hospitality and tourism usually see a boost in visitors taking advantage of school vacation time. That’s part of the reason Mitch Daniels, the chef de cuisine at Hyperion Public in Silver Lake, recently posted an opening for a dishwasher.

“In this economy, it’s definitely hard,” he said. “But we’ve been doing well and things are definitely going to pick up in the summer,” he said.

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