01/16/2019

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August 2018 Jobs Report

Download August 2018 Jobs Report

Highlights for policy makers:

Unemployment Rate Level at 4.2%; Total Employment up 7,300

The Labor Force data for August 2018 (seasonally adjusted; California preliminary) is shown below, along with the change from the prior month:

Seasonally Adjusted California US
Aug 2018 Change from Jul 2018 Aug 2018 Change from Jul 2018
Unemployment Rate 4.2% 0.0 3.9% -0.0
Labor Force 19,351,000 0.0% 161,776,000 -0.3%
Participation Rate 61.9% 0.0 62.7% -0.2
Employment 18,547,900 0.0% 155,542,000 -0.3%
Unemployment 803,100 -0.6% 6,234,000 -0.7%
Source: California Employment Development Department; US Bureau of Labor Statistics

 

The related not seasonally adjusted numbers (California preliminary), with the change from August 2017:

Not Seasonally Adjusted California US
Aug 2018 Change from Aug 2017 Aug 2018 Change from Aug 2017
Unemployment Rate 4.3% -0.6 3.9% -0.6
Labor Force 19,368,100 0.0% 161,909,000 0.7%
Participation Rate 61.9% -0.6 62.7% -0.3
Employment 18,542,500 0.7% 155,539,000 1.3%
Unemployment 825,600 -13.9% 6,730,000 -12.6%
Source: California Employment Development Department; US Bureau of Labor Statistics

 

California Employment Development Department’s (EDD) latest data shows on a seasonally adjusted basis, total employment rose 7,300 from July, while the number of unemployed fell 4,400. The labor force notched up by 2,900.

California’s seasonally adjusted unemployment rate remained at 4.2%, the lowest level in the current data series that began in 1976. California tied with Maryland and New Jersey for the 13th highest unemployment rate among the states. The unadjusted rate dropped from 4.9% in August 2017 to 4.3%.

Total US employment saw a seasonally adjusted loss of 423,000 from July, while the number of unemployed dropped by 46,000 and the total labor force dipped by 469,000. The national unemployment rate remained level at 3.9%.

Labor Force Participation Rate Level at 61.9%

California’s participation rate (seasonally adjusted) in August remained at 61.9%, while the US rate dipped to 62.7%. The California rate continued to match the revised series low reached previously in 2015.

California’s labor force was essentially unchanged, dipping 8,400 over the year ending August 2018, or 0.1% growth. The US as a whole grew 1.0 million – a 0.7% expansion. While workers elsewhere continue to return to the workforce, California’s continued low rate has implications for future growth in the state, including the ability to sustain jobs expansion as fewer workers are available and continued effects on state and local budgets for higher social program spending compared to other states.

Considered by age, the prime working age groups in California (age 25-54 and 55-64) remain somewhat below their previous highs since 2000, with youth employment remaining below levels from a year ago. These trends in particular have long-term implications for income distributions in the state, as most studies indicate that work skills developed through early employment are correlated with long-term earnings potential. In contrast to the younger groups, persons 65 and older show a higher labor force participation rate compared to the prior low at the beginning of this period.

Labor Force Participation Rate by Age (12-month moving average)

Prior Max August 2018
Total 67.2% 62.2%
16-19 46.8% 27.3%
20-24 76.4% 65.6%
25-54 82.1% 80.3%
55-64 66.3% 63.7%
Prior Min
65+ 12.1% 19.7%
Source: Current Population Survey microdata; EDD
Note: All entries from 12-month moving average

State Employment Growth Rankings—California Remains at 5th

Change in Employment, August 2017 – August 2018

Rank Number of Employed Percentage Change Population Adjusted
(employment growth per 1,000 civilian
noninstitutional population)
1 TX 274,500 MA 4.0% MA 25.4
2 FL 148,900 NV 2.7% CO 17.2
3 MA 141,800 NM 2.6% NV 16.1
4 GA 115,000 CO 2.6% DE 14.7
5 CA 85,200 DE 2.5% DC 14.6
6 CO 75,800 GA 2.4% GA 14.3
7 NC 67,100 DC 2.2% NM 14.0
8 IN 66,900 ID 2.1% ID 13.3
9 VA 65,000 TX 2.1% IN 12.9
10 MN 49,800 IN 2.1% TX 12.9
11 AZ 49,200 OK 1.9% NH 11.5
12 IL 41,400 NH 1.7% OK 11.4
13 NV 37,900 MN 1.7% MN 11.4
14 TN 37,300 RI 1.7% UT 11.3
15 OK 34,200 UT 1.7% RI 10.3
16 AL 32,100 VA 1.6% VA 9.8
17 WA 31,400 AZ 1.6% AZ 9.0
18 MI 31,000 AL 1.5% FL 8.8
19 WI 28,100 FL 1.5% AL 8.4
20 UT 25,400 NC 1.4% NC 8.3
21 NM 22,700 TN 1.2% VT 7.2
22 KY 21,000 VT 1.1% TN 7.1
23 MO 20,100 KY 1.1% SD 6.8
24 OH 19,200 SD 1.0% IA 6.4
25 ID 17,400 IA 1.0% WI 6.1
26 IA 15,800 ME 1.0% KY 6.0
27 LA 15,800 MS 0.9% ME 5.9
28 NH 12,700 WI 0.9% NE 5.7
29 NY 12,700 WA 0.9% WA 5.4
30 DE 11,300 NE 0.9% MS 4.9
31 MS 11,200 LA 0.8% LA 4.4
32 SC 9,300 MO 0.7% MO 4.2
33 RI 8,900 HI 0.7% IL 4.1
34 NE 8,400 IL 0.7% HI 4.1
35 DC 8,300 MI 0.7% MI 3.9
36 PA 7,100 CA 0.5% CA 2.7
37 ME 6,500 SC 0.4% SC 2.4
38 OR 4,600 OH 0.3% OH 2.1
39 HI 4,500 WV 0.3% KS 1.6
40 SD 4,500 KS 0.3% WV 1.5
US 2,071,000 US 1.3% US 8.1
Source: US Bureau of Labor Statistics, Seasonally Adjusted

 

Between August 2017 and August 2018, Bureau of Labor Statistics (BLS) data shows the total number of employed in California increased by 85,200 (seasonally adjusted), or 4.1% of the total net employment gains in this period for the US. Based on the total numbers, California remained in 5th place behind Texas (which has a civilian working age population only 69% as large as California’s), Florida (55% as large), Massachusetts, and Georgia. Measured by percentage change in employment over the year, California stayed 36th highest. Adjusted for working age population, California was 36th as well.

Nonfarm Jobs Up 44,800

EDD reported that between July and August 2018, seasonally adjusted nonfarm wage and salary jobs grew by 44,800. July’s results were revised to a 34,400 gain from the previously reported 46,700.

In the not seasonally adjusted nonfarm numbers that allow a more detailed look at industry shifts, hiring saw increases in all but 5 industries over the year. The change in total payroll jobs from August 2017 saw the largest increases in lower wage Social Assistance (41,300), lower wage Food Services (41,100), and middle class wage Construction (41,000). Declines were led by Other Services (-600), Mining & Logging (-400), and Wholesale Trade (-200).

Not Seasonally Adjusted Payroll Jobs Aug 2018 Jul 2018 Change Aug 2018 – Jul 2018 Change Aug 2018 – Aug 2017
Total Farm 481,700 479,000 2,700 5,300
Mining and Logging 22,600 22,700 -100 -400
Construction 877,100 865,700 11,400 41,000
Manufacturing 1,335,500 1,327,700 7,800 5,700
Wholesale Trade 727,100 724,900 2,200 -200
Retail Trade 1,693,200 1,689,500 3,700 8,500
Utilities 58,100 58,100 0 -100
Transportation & Warehousing 593,400 587,400 6,000 21,300
Information 546,500 543,200 3,300 15,100
Finance & Insurance 551,100 549,500 1,600 2,500
Real Estate & Rental & Leasing 288,200 286,500 1,700 1,500
Professional, Scientific & Technical Services 1,274,900 1,271,100 3,800 33,800
Management of Companies & Enterprises 235,400 236,300 -900 3,500
Administrative & Support & Waste Services 1,144,900 1,132,100 12,800 29,100
Educational Services 352,700 356,400 -3,700 15,100
Health Care 1,534,300 1,528,500 5,800 28,100
Social Assistance 818,600 797,600 21,000 41,300
Arts, Entertainment & Recreation 325,200 329,000 -3,800 4,800
Accommodation 238,900 239,300 -400 5,800
Food Services 1,471,000 1,477,300 -6,300 41,100
Other Services 564,900 566,200 -1,300 -600
Government 2,473,400 2,449,600 23,800 36,100
Total Nonfarm 17,127,000 17,038,600 88,400 333,000
Total Wage and Salary 17,608,700 17,517,600 91,100 338,300
Source: California Employment Development Department

 

At a 348,900 increase, California remained at 2nd highest measured by seasonally adjusted nonfarm jobs among the states from August 2017 to August 2018, behind Texas at 394,500. By percentage growth in jobs, California dipped to 13th highest at 2.1%, but still above the US average. By population adjusted jobs growth, California rose to 15th highest.

Change in Nonfarm Jobs (seasonally adjusted), August 2017 – August 2018

Rank Number of Jobs Employment Growth (%) Population Adjusted
(jobs growth per 1,000 civilian
noninstitutional population)
1 TX 394,500 UT 3.5% UT 23.0
2 CA 348,900 NV 3.3% NV 19.0
3 FL 220,200 WA 3.3% WA 18.6
4 WA 108,800 TX 3.2% TX 18.5
5 NC 102,800 ID 3.1% ID 16.8
6 OH 90,200 AZ 2.9% CO 16.4
7 NY 90,200 HI 2.7% HI 16.2
8 GA 88,900 CO 2.7% AZ 14.6
9 AZ 79,700 FL 2.6% WY 14.5
10 CO 72,200 OR 2.4% OR 13.3
11 MA 68,100 NC 2.3% FL 13.0
12 PA 65,400 WY 2.3% NC 12.8
13 NJ 61,500 CA 2.1% MA 12.2
14 MI 56,300 GA 2.0% KS 12.0
15 TN 56,000 OK 2.0% CA 11.2
16 VA 54,800 NM 2.0% GA 11.1
17 UT 51,900 SC 1.9% OK 11.0
18 IL 47,500 KS 1.9% NH 10.8
19 NV 44,800 MA 1.9% TN 10.6
20 OR 44,500 TN 1.9% SC 10.3
21 MN 44,400 NH 1.8% DC 10.2
22 WI 44,200 OH 1.6% MN 10.2
23 SC 40,600 MS 1.6% NM 10.1
24 MO 35,300 MN 1.5% OH 9.8
25 OK 33,100 WI 1.5% NE 9.7
US2,330,000 US1.6% US9.1
Source: US Bureau of Labor Statistics

Four Industries Still below 2007 Pre-Recession Job Levels

Source: California Employment Development Department, not seasonally adjusted; wages are running 4 quarter average from QCEW wage data

 

Comparing the number of jobs by industry in August 2018 (not seasonally adjusted), four industries had employment below the 2007 pre-recession levels. The highest gain industries were led by lower wage Food Services, Health Care (with a relatively higher mix of lower and higher wage occupations), lower wage Social Assistance, and higher wage Professional, Scientific & Technical Services. Of the lagging industries, three—Manufacturing, Mining & Logging, and Construction—are blue collar middle class wage industries, while the higher wage Finance & Insurance also remained in the minus column. Construction continues to improve but still remains 42,700 below the 2007 level, and 89,200 (9.2%) below the previous high in 2006.

In addition, higher wage Utilities and middle class wage Real Estate, Rental, & Leasing continue near their 2007 levels, with a combined total of only 2,900 jobs in the plus column. In spite of trade jitters, blue collar-middle class wage Transportation & Warehousing continued growing.

Job Gains by Wage Level

The following chart illustrates the trend for total wage and salary jobs by general wage level, according to the industry wage classification used previously in other Center analyses of this issue. As indicated, nearly half (46%) of net jobs growth since the recession has been in the lower wage industries. For the 12 months ending August 2018, lower wage industries accounted for under a third (30%) of new jobs, while middle class-blue collar jobs produced over a quarter (28%) as Construction levels remained higher compared to prior years.

Source: Analysis of California Employment Development Department data, not seasonally adjusted

Two-Tier Economy Persists—Central Valley Unemployment More than Twice as High as Bay Area

The level of unemployment rates (all data is not seasonally adjusted) continues to vary widely across the state, ranging from 2.9% in the Bay Area to more than twice as large at 6.7% in the Central Valley.

Not Seasonally Adjusted Unemployment Rate (%) August 2018
California 4.3
Bay Area 2.8
Orange County 3.1
Sacramento 3.8
Central Coast 3.9
Central Sierra 4.0
San Diego/Imperial 4.2
Inland Empire 4.5
Upstate California 4.8
Los Angeles 4.9
Central Valley 6.7

By Legislative District:

Lowest 10 Unemployment Rates
CD18 (Eshoo-D) 2.1 SD13 (Hill-D) 2.1 AD16 (Baker-R) 2.0
CD12 (Pelosi-D) 2.2 SD11 (Wiener-D) 2.5 AD22 (Mullin-D) 2.0
CD52 (Peters-D) 2.5 SD39 (Atkins-D) 2.7 AD24 (Berman-D) 2.2
CD17 (Khanna-D) 2.5 SD36 (Bates-R) 2.7 AD28 (Low-D) 2.3
CD14 (Speier-D) 2.5 SD37 (Moorlach-R) 2.8 AD17 (Chiu-D) 2.4
CD15 (Swalwell-D) 2.6 SD10 (Wieckowski-D) 2.8 AD77 (Maienschein-R) 2.5
CD45 (Walters-R) 2.7 SD07 (Glazer-D) 2.8 AD25 (Chu-D) 2.5
CD49 (Issa-R) 2.7 SD15 (Beall-D) 2.8 AD19 (Ting-D) 2.5
CD48 (Rohrabacher-R) 2.9 SD02 (McGuire-D) 3.0 AD73 (Brough-R) 2.6
CD02 (Huffman-D) 2.9 SD38 (Anderson-R) 3.3 AD78 (Gloria-D) 2.6
Highest 10 Unemployment Rates
CD10 (Denham-R) 5.5 SD18 (Hertzberg-D) 5.5 AD13 (Eggman-D) 6.1
CD29 (Cárdenas-D) 5.7 SD05 (Galgiani-D) 5.5 AD51 (Carrillo-D) 6.2
CD43 (Waters-D) 5.8 SD33 (Lara-D) 5.7 AD36 (Lackey-R) 6.3
CD40 (Roybal-Allard-D) 5.8 SD24 (de León-D) 5.7 AD59 (Jones-Sawyer-D) 6.6
CD23 (McCarthy-R) 6.4 SD30 (Mitchell-D) 5.9 AD64 (Gipson-D) 7.2
CD22 (Nunes-R) 6.6 SD12 (Cannella-R) 6.1 AD21 (Gray-D) 7.2
CD44 (Barragán-D) 7.0 SD35 (Bradford-D) 6.2 AD31 (Arambula-D) 7.8
CD16 (Costa-D) 7.3 SD16 (Fuller-R) 6.3 AD26 (Mathis-R) 8.4
CD21 (Valadao-R) 8.4 SD40 (Hueso-D) 7.7 AD32 (Salas-D) 8.7
CD51 (Vargas-D) 9.1 SD14 (Vidak-R) 9.1 AD56 (Garcia-D) 10.7

Bay Area Provided 41.1% of Net Employment Growth Since Recession

Containing 19.6% of the state’s population, the Bay Area was responsible for 41.1% of the net growth in employment since the pre-recession peaks in 2007. Los Angeles Region, containing 29.2% of the population, accounted for the third largest share at 17.6%. Inland Empire is the only other region—at a growing margin—continuing to show employment gains above their population share. Based on the preliminary August numbers, Inland Empire has now eclipsed Los Angeles Region for employment growth compared to before the recession.

Seven California MSAs in the 10 Worst Unemployment Rates Nationally

According to BLS data, of the 10 Metropolitan Statistical Areas (MSAs) with the worst unemployment rates nationally, seven are in California. Of the 20 worst, nine are in California.

Metropolitan Area July 2018 Rate Rank
Cumberland, MD-WV Metropolitan Statistical Area 6.2 369
Flint, MI Metropolitan Statistical Area 6.2 369
Shreveport-Bossier City, LA Metropolitan Statistical Area 6.2 369
Alexandria, LA Metropolitan Statistical Area 6.3 372
Beaumont-Port Arthur, TX Metropolitan Statistical Area 6.3 372
Weirton-Steubenville, WV-OH Metropolitan Statistical Area 6.5 374
Brownsville-Harlingen, TX Metropolitan Statistical Area 6.6 375
Hammond, LA Metropolitan Statistical Area 6.6 375
Yuba City, CA Metropolitan Statistical Area 6.6 375
Modesto, CA Metropolitan Statistical Area 6.7 378
McAllen-Edinburg-Mission, TX Metropolitan Statistical Area 6.9 379
Madera, CA Metropolitan Statistical Area 7.0 380
Vineland-Bridgeton, NJ Metropolitan Statistical Area 7.0 380
Fresno, CA Metropolitan Statistical Area 7.2 382
Hanford-Corcoran, CA Metropolitan Statistical Area 7.5 383
Merced, CA Metropolitan Statistical Area 8.1 384
Bakersfield, CA Metropolitan Statistical Area 8.2 385
Visalia-Porterville, CA Metropolitan Statistical Area 9.3 386
El Centro, CA Metropolitan Statistical Area 19.3 387
Yuma, AZ Metropolitan Statistical Area 20.9 388

 

Note: All data sources, methodologies, and historical data series available at CenterforJobs.org/ca.