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Unemployment rate falls, but hiring slows in California and L.A.

May 17, 2013|By Alana Semuels
  • Wal-Mart has been taking applications for a new story it's planning in Chinatown, but a slump in overall sales could lead to a slowdown in hiring for the retailer.
Wal-Mart has been taking applications for a new story it's planning… (Gary Friedman / Los Angeles…)

After a few robust months, the pace of hiring in California slowed in April as employers concerned about the economy cut back on adding new employees.

In a month in which the nation added 165,000 net new jobs, the Golden State gained just 10,400 amidst sluggish hiring in the education, financial services and trade sectors. Construction was the one bright spot, adding 7,400 jobs as building in metro areas such as Los Angeles continued to boom.

The state’s unemployment rate fell to 9% from 9.4% the month before as discouraged workers gave up looking for work and dropped out of the labor force.

Los Angeles County added just 200 net new jobs over the month, though its unemployment rate slipped to 9.9% from 10.2% the month before. With a boost from the leisure and hospitality sector, Orange County added 3,300 jobs, and its unemployment rate dropped to 5.7%, from 6.3% the month before. The Inland Empire, which encompasses Riverside and San Bernardino counties, gained 900 jobs while its unemployment rate fell to 9.6% from 10.5% the year before.

Quiz: Why are California gas prices so high? 

Though the state has added more than 77,000 jobs this year, employers seem to be suddenly holding back, said Esmael Adibi, an economist at Chapman University.

“It looks like payroll employment is losing a little bit of steam,” he said. “The culprit here is the retail sector which is not really making any contribution to job growth.”

Though consumer confidence has remained high despite global economic troubles, retailers are still concerned that Americans will stop spending once they start to feel the effects of the expiration of the payroll tax cut in January.

Retailer Wal-Mart, which reported first-quarter earnings this week, said that sales dropped in the three months ending April 30, and that store visits dropped 1.8%. Macy’s, on the other hand, posted better-than-expected earnings this week, with sales up 3.8%.

Retail employment in California is actually down 0.1% over the year.

Still, Adibi said, the state budget picture is improving, which could help stem some of the hemorrhaging of government jobs that has dragged down the economy in California and the nation. Though the federal government is continuing to shed jobs in California, state government added 1,200 between March and April.

Federal budget cuts will still continue to affect the state and its residents; this week, California’s Employment Development Department announced it would answer calls to 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.

That’s going to make life even tougher for Jeff Romig, 56, who has been looking for a full-time job in a restaurant for three years. He’s found some temporary stuff along the way -- selling food at conventions, demonstrating products in grocery stores -- but is desperate for something stable with benefits.

“I’m looking for anything that will help me pay next month’s rent,” said Romig, who lives in Long Beach.

“Everywhere I go, I get the same story: 'We don’t have enough work for the people we have now,' ” he said. “It’s just really slow, everybody’s slow.”

On the bright side, there are fewer unemployed Californians like Romig now than there have been in years. There are 303,000 fewer unemployed than a year ago, and the unemployment rate, at 9%, is the lowest it has been since November 2008.

ALSO:

California's jobless hotline hours slashed

California's April unemployment rate drops to 9%

California's unemployment rate falls to 9.4% in March

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