06/27/2019

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June 2018 Jobs Report

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Highlights for policy makers:

Unemployment Rate Level at 4.2%; Total Employment Down 8,900

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

Seasonally Adjusted California US
Jun 2018 Change from May 2018 Jun 2018 Change from May 2018
Unemployment Rate 4.2% 0.0 4.0% 0.2
Labor Force 19,341,300 0.0% 162,140,000 0.4%
Participation Rate 61.9% -0.1 62.9% 0.2
Employment 18,527,300 0.0% 155,576,000 0.1%
Unemployment 814,100 0.7% 6,564,000 8.2%
Source: California Employment Development Department; US Bureau of Labor Statistics

 

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

Not Seasonally Adjusted California US
Jun 2018 Change from Jun 2017 Jun 2018 Change from Jun 2017
Unemployment Rate 4.5% -0.3 4.2% -0.3
Labor Force 19,356,200 0.3% 163,277,000 1.2%
Participation Rate 62.0% -0.3 63.4% 0.1
Employment 18,486,800 0.7% 156,465,000 1.5%
Unemployment 869,400 -6.7% 6,812,000 -6.0%
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 edged down 8,900 from May, while the number of unemployed notched up by 5,700. The labor force eased by 3,200.

California’s seasonally adjusted unemployment rate remained at 4.2%, the lowest level in the current data series that began in 1976, as the labor force continued to move downwards for the fourth month in a row. California tied with North Carolina for the 19th highest unemployment rate among the states. The unadjusted rate dropped from 4.8% in June 2017 to 4.5%.

Total US employment saw a seasonally adjusted gain of 102,000 from May, while the number of unemployed grew by 499,000 as the total labor force expanded by 601,000. The national unemployment rate rose to 4.0%.

Labor Force Participation Rate Continues Dip to 61.9%

California’s participation rate (seasonally adjusted) in June fell another 0.1 point to 62.0%, while the US rate rose to 62.9%. The California rate matched the revised series low reached previously in 2015.

California’s labor force grew only 39,900 over the year ending June 2018, or 0.2% growth. The US as a whole grew 1.9 million – a 1.2% 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 June 2018
Total 67.2% 62.2%
16-19 46.8% 27.1%
20-24 76.4% 66.0%
25-54 82.1% 80.1%
55-64 66.3% 63.5%
Prior Min
65+ 12.1% 19.8%
Source: Current Population Survey microdata; EDD
Note: All entries from 12-month moving average

State Employment Growth Rankings—California Drops to 3rd

Change in Employment, June 2017 – June 2018

Rank Number of Employed Percentage Change Population Adjusted
(employment growth per 1,000 civilian
noninstitutional population)
1 TX 306,000 CO 2.9% CO 19.4
2 FL 159,800 MA 2.9% MA 18.4
3 CA 151,700 ID 2.7% ID 16.9
4 GA 123,500 NV 2.7% DC 15.8
5 MA102,800 GA 2.6% NV 15.8
6 CO 85,200 NM 2.5% GA 15.4
7 AZ 69,600 DC 2.4% UT 15.4
8 NC 67,600 TX 2.4% TX 14.4
9 VA 61,000 UT 2.3% NM 13.3
10 MN 56,800 AZ 2.2% MN 13.0
11 TN 53,100 DE 2.2% DE12.9
12 IL 48,600 MN 1.9% AZ 12.8
13 IN 47,200 OK 1.8% OK 10.8
14 OH 44,800 LA 1.8% VT 10.3
15 WI 41,500 TN 1.7% LA 10.2
16 WA 39,100 FL 1.6% TN 10.1
17 NV 37,100 VT 1.6% FL 9.4
18 LA 36,700 IN 1.5% VA 9.2
19 UT 34,500 VA 1.5% IN 9.1
20 OK 32,300 NC 1.4% WI 9.0
21 MI 32,100 WI 1.4% NC 8.4
22 AL 24,600 RI 1.3% RI 8.2
23 KY 22,800 NH 1.2% NH 8.2
24 ID 22,000 AL 1.2% SD 7.4
25 NM 21,600 KY 1.2% WA 6.7
26 OR 17,400 SD 1.1% KY 6.6
27 SC 12,200 WA 1.1% AL 6.4
28 DE 9,900 ME 1.0% ME 6.2
29 DC 9,000 OR 0.9% OR 5.2
30 NH 9,000 CA 0.8% NE 4.9
31 IA 7,900 OH 0.8% CA 4.9
32 MO 7,500 IL 0.8% OH 4.9
33 NE 7,200 NE 0.7% IL 4.8
34 RI 7,100 WV 0.7% MI 4.0
35 ME 6,800 MI 0.7% HI 3.7
US 2,326,000 US 1.5% US 9.1
Source: US Bureau of Labor Statistics, Seasonally Adjusted

 

Between June 2017 and June 2018, Bureau of Labor Statistics (BLS) data shows the total number of employed in California increased by 151,700 (seasonally adjusted), or 6.5% of the total net employment gains in this period for the US. Based on the total numbers, California dropped to 3rd place behind Texas (which has a civilian working age population only 69% as large as California’s) and Florida (55% as large). Measured by percentage change in employment over the year, California dropped to 30th highest. Adjusted for working age population, California dropped to 31st.

Nonfarm Jobs Little Changed at 800

EDD reported that between May and June 2018, seasonally adjusted nonfarm wage and salary jobs grew by only 800. May’s results were revised to a 7,200 gain from the previously reported 5,500.

In the not seasonally adjusted nonfarm numbers that allows 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 June 2017 saw the largest increases in Construction (44,300), Professional, Scientific & Technical Services (39,300), and Social Assistance (30,400). Declines were in Wholesale Trade (-2,100), Finance & Insurance (-1,700), and Other Services (-1,400).

Not Seasonally Adjusted Payroll Jobs June 2018 May 2018 Change June 2018 – May 2018 Change June 2018 – June 2017
Total Farm 484,500 479,500 5,000 -2,000
Mining and Logging 22,200 22,000 200 -200
Construction 863,600 857,600 6,000 44,300
Manufacturing 1,320,700 1,316,600 4,100 4,200
Wholesale Trade 724,100 721,800 2,300 -2,100
Retail Trade 1,678,400 1,680,200 -1,800 8,100
Utilities 58,100 58,000 100 -400
Transportation & Warehousing 584,200 579,700 4,500 22,500
Information 542,200 534,500 7,700 18,800
Finance & Insurance 545,600 546,400 -800 -1,700
Real Estate & Rental & Leasing 287,100 287,300 -200 2,500
Professional, Scientific & Technical Services 1,268,500 1,253,300 15,200 39,300
Management of Companies & Enterprises 234,500 233,300 1,200 1,300
Administrative & Support & Waste Services 1,125,500 1,124,800 700 22,500
Educational Services 369,600 379,000 -9,400 21,700
Health Care 1,528,200 1,522,000 6,200 28,400
Social Assistance 802,900 810,900 -8,000 30,400
Arts, Entertainment & Recreation 322,800 317,600 5,200 700
Accommodation 235,800 230,200 5,600 5,200
Food Services 1,464,300 1,464,600 -300 30,300
Other Services 568,500 567,400 1,100 -1,400
Government 2,618,500 2,629,900 -11,400 25,900
Total Nonfarm 17,165,300 17,137,100 28,200 300,300
Total Wage and Salary 17,649,800 17,616,600 33,200 298,300
Source: California Employment Development Department

 

At a 269,100 increase, California remained at 2nd highest measured by seasonally adjusted nonfarm jobs among the states from June 2017 to June 2018, behind Texas at 359,500. By percentage growth in jobs, California dropped to 19th highest at 1.6%, matching the US average. By population adjusted jobs growth, California dropped to 23th highest.

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

Rank Number of Jobs Employment Growth (%) Population Adjusted
(jobs growth per 1,000 civilian
noninstitutional population)
1 TX 359,500 ID 3.0% UT 19.5
2 CA 269,100 UT 3.0% CO 17.0
3 FL 170,500 TX 2.9% TX 16.9
4 NY 107,700 CO 2.8% ID 16.7
5 NC 103,400 NV 2.8% NV 16.0
6 WA 90,000 WA 2.7% WA 15.5
7 PA 77,500 AZ 2.4% NC 12.9
8 GA77,300 NC 2.3% AZ 12.1
9 CO 74,600 OR 2.0% OR 11.4
10 OH 72,300 FL 2.0% MA 11.3
11 AZ 66,100 TN 2.0% TN11.3
12 MA 63,200 NH 1.8% NH 11.2
13 TN 59,500 KS 1.8% KS 11.2
14 IL 58,300 MA 1.7% WY 10.9
15 MI51,600 WY 1.7% FL 10.1
16 UT 43,900 GA 1.7% SD 9.9
17 NJ 43,900 SC 1.7% GA 9.7
18 VA 43,800 OK 1.6% NE 9.3
19 OR 38,000 CA 1.6% OK 9.1
20 NV 37,600 MS 1.5% HI 8.9
21 SC 35,200 NM 1.5% SC 8.9
22 MO 34,300 RI 1.5% RI 8.7
23 MN 33,300 HI 1.5% CA8.7
24 WI 30,000 SD 1.5% OH7.9
25 OK 27,200 NE 1.3% NM7.8
US2,374,000 US1.6% US9.3
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 June 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 has overall improved but still remains 54,200 below the 2007 level, and 102,700 (10.6%) below the previous high in 2006.

In addition, higher wage Utilities and middle class wage Real Estate, Rental, & Leasing notched close to their 2007 levels, with a combined total of only 1,900 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 (47%) of net jobs growth since the recession has been in the lower wage industries. For the 12 months ending June 2018, lower wage industries accounted for about a quarter (24%) of new jobs, while middle class-blue collar jobs produced over a quarter (30%) 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 3.1% in the Bay Area to more than twice as large at 7.9% in the Central Valley.

Not Seasonally Adjusted Unemployment Rate (%) June 2018
California 4.5
Bay Area 3.1
Orange County 3.3
Sacramento 4.1
San Diego/Imperial 4.3
Central Sierra 4.4
Central Coast 4.5
Inland Empire 4.7
Los Angeles 4.7
Upstate California 5.6
Central Valley 7.9

By Legislative District:

Lowest 10 Unemployment Rates
CD18 (Eshoo-D) 2.3 SD13 (Hill-D) 2.3 AD16 (Baker-R) 2.2
CD12 (Pelosi-D) 2.5 SD11 (Wiener-D) 2.7 AD22 (Mullin-D) 2.2
CD52 (Peters-D) 2.7 SD39 (Atkins-D) 2.9 AD24 (Berman-D) 2.4
CD17 (Khanna-D) 2.7 SD36 (Bates-R) 2.9 AD28 (Low-D) 2.5
CD14 (Speier-D) 2.8 SD37 (Moorlach-R) 3.0 AD17 (Chiu-D) 2.7
CD45 (Walters-R) 2.9 SD10 (Wieckowski-D) 3.1 AD77 (Maienschein-R) 2.7
CD49 (Issa-R) 2.9 SD07 (Glazer-D) 3.1 AD25 (Chu-D) 2.7
CD15 (Swalwell-D) 2.9 SD15 (Beall-D) 3.1 AD73 (Brough-R) 2.8
CD48 (Rohrabacher-R) 3.1 SD02 (McGuire-D) 3.4 AD78 (Gloria-D) 2.8
CD02 (Huffman-D) 3.2 SD34 (Nguyen-R) 3.6 AD19 (Ting-D) 2.8
Highest 10 Unemployment Rates
CD43 (Waters-D) 5.5 SD33 (Lara-D) 5.4 AD36 (Lackey-R) 6.3
CD40 (Roybal-Allard-D) 5.5 SD24 (de León-D) 5.4 AD23 (Patterson-R) 6.5
CD09 (McNerney-D) 6.0 SD30 (Mitchell-D) 5.6 AD64 (Gipson-D) 6.8
CD10 (Denham-R) 6.6 SD35 (Bradford-D) 5.9 AD34 (Fong-R) 6.8
CD44 (Barragán-D) 6.6 SD08 (Berryhill-R) 6.2 AD13 (Eggman-D) 7.0
CD23 (McCarthy-R) 7.4 SD05 (Galgiani-D) 6.3 AD21 (Gray-D) 8.8
CD22 (Nunes-R) 7.5 SD16 (Fuller-R) 7.3 AD31 (Arambula-D) 9.0
CD16 (Costa-D) 8.7 SD12 (Cannella-R) 7.4 AD26 (Mathis-R) 9.3
CD51 (Vargas-D) 8.8 SD40 (Hueso-D) 7.6 AD56 (Garcia-D) 9.9
CD21 (Valadao-R) 9.9 SD14 (Vidak-R) 10.6 AD32 (Salas-D) 10.5

Bay Area Provided 39.6% of Net Employment Growth Since Recession

Containing 19.4% of the state’s population, the Bay Area was responsible for 39.6% 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 second largest share at 20.0%. Inland Empire is the only other region—at a growing margin—continuing to show employment gains above their population share.

Eight 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, 8 are in California. Of the 20 worst, 9 are in California.

Metropolitan Area May 2018 Rate Rank
Longview, WA Metropolitan Statistical Area 5.8 369
Rocky Mount, NC Metropolitan Statistical Area 5.8 369
Weirton-Steubenville, WV-OH Metropolitan Statistical Area 5.8 369
Beaumont-Port Arthur, TX Metropolitan Statistical Area 5.9 372
Brownsville-Harlingen, TX Metropolitan Statistical Area 6.0 373
Yakima, WA Metropolitan Statistical Area 6.0 373
Modesto, CA Metropolitan Statistical Area 6.1 375
McAllen-Edinburg-Mission, TX Metropolitan Statistical Area 6.2 376
Fairbanks, AK Metropolitan Statistical Area 6.3 377
Anchorage, AK Metropolitan Statistical Area 6.4 378
Ocean City, NJ Metropolitan Statistical Area 6.4 378
Madera, CA Metropolitan Statistical Area 6.5 380
Yuba City, CA Metropolitan Statistical Area 6.5 380
Fresno, CA Metropolitan Statistical Area 6.9 382
Hanford-Corcoran, CA Metropolitan Statistical Area 6.9 382
Bakersfield, CA Metropolitan Statistical Area 7.7 384
Merced, CA Metropolitan Statistical Area 7.8 385
Visalia-Porterville, CA Metropolitan Statistical Area 8.4 386
El Centro, CA Metropolitan Statistical Area 15.8 387
Yuma, AZ Metropolitan Statistical Area 16.0 388

 

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