05/09/2021

Reports » Job Reports

May 2016

Highlights for policy makers:

Unemployment Rate Eases to 5.2%; Total Employment Edges up 9,600

The Labor Force data for May 2016 (seasonally adjusted; California preliminary) is shown below, along with the change from the prior month:

Seasonally Adjusted California US
May 2016 Change from Apr 2016 May 2016 Change from Apr 2016
Unemployment Rate 5.2 -0.1 4.7 -0.3
Labor Force 19,075,800 -0.1% 158,466,000 -0.3%
Participation Rate 61.9 -0.1 62.6 -0.2
Employment 18,081,300 0.1% 151,030,000 0.0%
Unemployment 994,500 -1.9% 7,436,000 -6.1%
Source: California Employment Development Department; US Bureau of Labor Statistics

The related not seasonally adjusted numbers (California preliminary), with the change from May 2015:

Not Seasonally Adjusted California US
May 2016 Change from May 2015 May 2016 Change from May 2015
Unemployment Rate 4.7 -1.4 4.5 -0.8
Labor Force 18,983,900 -0.3% 158,800,000 0.7%
Participation Rate 61.6 -0.9 62.7 -0.3
Employment 18,085,000 1.2% 151,594,000 1.5%
Unemployment 898,900 -22.8% 7,207,000 -13.9%
Source: California Employment Development Department; US Bureau of Labor Statistics

California Employment Development Department’s (EDD) latest release shows on a seasonally adjusted basis, total employment essentially remained level, edging up only 9,600 from April. Unemployed dropped by 19,200, with roughly half reflected in the employment gains and the other half through decline in the labor force participation. California’s seasonally adjusted unemployment rate continued to decline from 5.3% in April to 5.2% in May. The unadjusted rate decreased from 6.1% in May 2015 to 4.7% in May 2016. California’s seasonally adjusted unemployment rate was the 18th highest among the states.

Total US employment saw a seasonally adjusted increase of only 26,000, while the number of unemployed decreased by 484,000. The US unemployment rate dropped from 5.0% in April to 4.7% in May, again primarily due to shrinkage in the total labor force.

Broader Unemployment Measures Remain Above Pre-Recession Lows

The May 2016 unemployment rate was the lowest since May 2007. The labor force participation rate, however, has now gone through a 15-month period at levels below the lows first reported in 1976. While employment growth has contributed to the declining unemployment rate, this drop-off in labor force participation—61.9% in May—has been a major factor as well.

The generally reported unemployment rate is only one of 6 unemployment measures tracked by the Bureau of Labor Statistics. These alternative rates vary from very narrowly defined measures, to broader accounting that considers persons who remain only marginally attached to the labor force:

  • U-1, the most narrow, measures persons unemployed 15 weeks or longer
  • U-2 covers those who have lost a job and those who completed temporary jobs
  • U-3, the official unemployment rate and the one generally reported, covers total unemployed
  • U-4 covers U-3 plus discouraged workers
  • U-5 covers U-4 plus all other marginally attached workers
  • U-6, the broadest measure, covers U-5 plus total employed part time for economic reasons

Looking at U-6, the most recently reported rate for California was 12.0% (4-quarter moving average) compared to a US average of 10.1%. The California rate was the 4th highest among the states, which ranged from 5.3% in North Dakota to 13.4% in Nevada.

The California U6 rate also remains well above the pre-recession levels, another indication that while California’s economy has rebuilt from the recession lows, it still in many areas has yet to achieve a full recovery. The California U6 rate compared to the US average is shown in the following figure. As indicated, both the U6 level and the spread between the California U6 rate and the US average have yet to return to the levels seen prior to the recession.

State Employment Growth Rankings

Change in Employment, May 2015 – May 2016
Rank Number of Employed Percentage Change Population Adjusted
(employment growth per 1,000 civilian
noninstitutional population)
1 CA 337,488 OR 6.1% OR 34.7
2 TX 259,316 TN 4.8% DE 27.3
3 FL 228,140 DE 4.6% TN 26.8
4 MI 165,367 AR 4.4% AR 23.8
5 NC 142,023 AZ 4.1% DC 23.7
6 TN 137,997 MI 3.7% AZ 23.0
7 NY 133,262 DC 3.6% CO 21.6
8 GA 133,230 SC 3.4% MI 21.0
9 AZ 121,199 CO 3.4% IN 19.6
10 IL 113,580 IN 3.2% SC 18.7
11 OR 111,613 NC 3.2% NC 18.3
12 OH 106,685 GA 3.0% GA 17.1
13 IN 100,236 MO 2.6% MO 16.1
14 PA 93,637 WA 2.5% WA 15.1
15 CO 91,490 FL 2.5% ID 14.2
16 NJ 85,413 MS 2.4% FL 14.0
17 WA 84,550 ID 2.3% UT 13.9
18 MO 76,452 HI 2.3% HI 13.8
19 SC 71,401 WI 2.1% WI 13.7
20 WI 62,568 UT 2.1% TX 12.7
21 AR 54,726 TX 2.1% MS 12.6
22 MD 50,076 NJ 2.0% NJ 12.1
23 MA 49,012 OH 2.0% NH 11.9
24 MN 48,431 AL 1.9% OH 11.7
25 AL 39,164 KY 1.9% MN 11.3
26 KY 35,382 CA 1.9% IL 11.3
27 UT 29,775 IL 1.9% CA 11.1
  US 2,282,000 US 1.5% US 9.0
Source: US Bureau of Labor Statistics, Seasonally Adjusted

Between May 2015 and May 2016, Bureau of Labor Statistics (BLS) data shows the total number of employed in California increased by 337,448 (seasonally adjusted), or 14.8% of the total net employment gains in this period for the US. Measured by percentage change in employment over the year, California was 26th highest. Adjusted for population, California ranked 27th. While California remains the leading state when measured by total change in employment, the recent data revisions continue to show a marked drop when ranked by performance relative to the size of the state’s economy and population.

Nonfarm Jobs Increase 15,200

EDD reported that between April and May 2016, seasonally adjusted nonfarm payroll jobs increased by 15,200. April’s gains were revised upwards to 70,000 from the previously reported gain of 59,600.

Looking at the not seasonally adjusted numbers, hiring saw increases in all but 4 industries. The change in total payroll jobs from April 2016 saw the largest increases in Farm (55,600) as seasonal hiring continued to increase, Health Care & Social Assistance (13,900), and Administrative & Support & Waste Services (12,700). Declines were in Management of Companies & Enterprises (-500), Professional, Scientific & Technical Services (-600), Information (-3,400), and Educational Services (-4,500) as schools began to enter the summer vacation period.

Not Seasonally Adjusted Payroll Jobs Apr 2016 May 2016 Change May 2016 – Apr 2016 Change May 2016 – May 2015
Total Farm 424,700 480,300 55,600 7,600
Mining & Logging 25,200 25,500 300 -3,900
Construction 754,200 760,700 6,500 41,700
Manufacturing 1,276,100 1,276,600 500 -11,100
Wholesale Trade 735,900 739,300 3,400 20,000
Retail Trade 1,663,600 1,665,200 1,600 27,100
Transportation, Warehousing & Utilities 557,700 562,000 4,300 17,400
Information 497,500 494,100 -3,400 13,800
Finance & Insurance 527,400 528,800 1,400 3,900
Real Estate & Rental & Leasing 278,900 280,900 2,000 9,400
Professional, Scientific & Technical Services 1,250,700 1,250,100 -600 56,000
Management of Companies & Enterprises 234,100 233,600 -500 4,300
Administrative & Support & Waste Services 1,063,300 1,076,000 12,700 34,300
Educational Services 378,100 373,600 -4,500 19,400
Health Care & Social Assistance 2,164,900 2,178,800 13,900 79,900
Individual & Family Services 586,000 585,400 -600 19,000
Arts, Entertainment, & Recreation 304,700 306,300 1,600 14,600
Accommodation & Food Service 1,583,800 1,593,000 9,200 46,200
Other Services 553,000 556,600 3,600 8,100
Government 2,552,100 2,560,600 8,500 62,800
Total Nonfarm 16,401,200 16,461,700 60,500 443,900
Total Wage & Salary 16,825,900 16,942,000 116,100 451,500
Source: California Employment Development Department

By total number of new jobs, California had the highest increase in seasonally adjusted nonfarm jobs among the states from May 2014 to May 2015, at 440,300 or 18.4% of the US net increase. By percentage growth in jobs, California was 8th highest, and by population adjusted jobs growth, 10th highest.

Change in Nonfarm Jobs (seasonally adjusted), May 2015 – May 2016
Rank Number of Jobs Employment Growth (%) Population Adjusted
(job growth per 1,000 civilian
noninstitutional population)
1 CA 440,300 OR 3.4% DC 31.5
2 FL 253,900 UT 3.3% UT 20.6
3 TX 171,800 ID 3.2% OR 18.2
4 GA 124,600 WA 3.2% WA 17.7
5 WA 100,800 FL 3.2% ID 17.0
6 NY 89,800 GA 2.9% GA 15.8
7 MI 79,900 AZ 2.9% FL 15.3
8 NC 78,100 CA 2.8% DE 14.5
9 AZ 75,700 DE 2.5% CO 14.4
10 OH 70,900 CO 2.4% CA 14.3
11 VA 67,900 SC 2.4% AZ 14.2
12 CO 62,000 DC 2.3% HI 12.5
13 TN 60,900 HI 2.2% SC 12.2
14 OR 59,500 TN 2.1% TN 11.7
15 MA 53,400 NV 2.0% NE 11.3
16 MD 48,600 MI 1.9% NV 10.9
17 NJ 48,000 NC 1.8% WI 10.4
18 WI 47,700 AR 1.8% VA 10.4
19 SC 47,300 MD 1.8% MD 10.2
20 IL 46,400 VA 1.8% MI 10.1
US 2,398,000 US 1.7% US 9.5
Source: US Bureau of Labor Statistics

Six Industries Below 2007 Pre-Recession Job Levels

Source: California Employment Development Department, Wage & Salary Jobs (seasonally adjusted), wages are running 4 quarter average from QCEW wage data

Comparing the number of jobs by industry in May 2016 (not seasonally adjusted), six industries showed employment below the 2007 pre-recession levels.  In the highest gain industries, Health Care & Social Assistance (less Individual & Family Services) remained the leading industry, followed by the two lowest wage industries in 2nd and 3rd place.  The highest wage blue collar industry—Mining & Logging—remained in negative territory as oil prices remained low.

Two-Tier Economy Persists

Unemployment rates (all data is not seasonally adjusted) continue to vary widely across the state, ranging from 3.4% in the Bay Area to more than double at 8.6% in the Central Valley.  

Not Seasonally Adjusted Unemployment Rate (%) May 2016
California 4.7
Bay Area 3.4
Orange County 3.6
Los Angeles 4.3
Sacramento Region 4.7
San Diego/Imperial 4.9
Inland Empire 5.3
Central Coast 5.3
Central Sierra 5.5
Upstate California 6.3
Central Valley 8.6

Looking at the regional shifts in the state’s economy, the Bay Area continues to dominate net employment growth.  Compared to the precession employment peak, the Bay Area with just under 20% of the population accounts for 45.6% of the net employment growth.  Continued population growth in Inland Empire and Central Valley has seen net employment gains as well, while Los Angeles Region with nearly 30% of the population contains only 13.0% of the net employment gains.

By Legislative District:

Lowest 10 Unemployment Rates
CD 12 (Pelosi – D) 2.7 SD 13 (Hill – D) 2.5 AD 22 (Mullin – D) 2.5
CD 18 (Eshoo – D) 2.7 SD 11 (Leno – D) 2.9 AD 16 (Baker – R) 2.5
CD 45 (Walters – R) 2.9 SD 37 (Moorlach – R) 3.1 AD 24 (Gordon – D) 2.6
CD 14 (Speier – D) 3.0 SD 26 (Allen – D) 3.2 AD 28 (Low – D) 2.8
CD 33 (Lieu – D) 3.0 SD 39 (Block – D) 3.3 AD 17 (Chiu – D) 2.9
CD 52 (Peters – D) 3.0 SD 36 (Bates – R) 3.4 AD 19 (Ting – D) 2.9
CD 17 (Honda – D) 3.1 SD 15 (Beall – D) 3.5 AD 66 (Hadley – R) 3.0
CD 27 (Chu – D) 3.2 SD 25 (Liu – D) 3.5 AD 74 (Harper – R) 3.0
CD 48 (Rohrabacher – R) 3.4 SD 07 (Glazer – D) 3.6 AD 77 (Maienschein – R) 3.0
CD 02 (Huffman – D) 3.5 SD 32 (Mendoza – D) 3.6 AD 73 (Brough – R) 3.0
Highest 10 Unemployment Rates
CD 44 (Hahn – D) 5.9 SD 21 (Runner – R) 5.2 AD 12 (Olsen – R) 6.6
CD 20 (Farr – D) 5.9 SD 31 (Roth – D) 5.4 AD 03 (Gallagher – R) 7.1
CD 41 (Takano – D) 6.0 SD 20 (Leyva – D) 5.4 AD 23 (Patterson – R) 7.5
CD 09 (McNerney – D) 6.7 SD 04 (Nielsen – R) 5.9 AD 13 (Eggman – D) 7.6
CD 10 (Denham – R) 7.4 SD 05 (Galgiani – D) 7.1 AD 34 (Grove – R) 7.8
CD 22 (Nunes – R) 8.0 SD 08 (Berryhill – R) 7.2 AD 26 (Mathis – R) 9.3
CD 23 (McCarthy – R) 8.2 SD 16 (Fuller – R) 8.0 AD 31 (Arambula – D) 9.7
CD 16 (Costa – D) 9.7 SD 12 (Cannella – R) 8.2 AD 21 (Gray – D) 9.7
CD 51 (Vargas – D) 9.8 SD 40 (Hueso – D) 8.3 AD 32 (Salas – D) 11.3
CD 21 (Valadao – R) 10.5 SD 14 (Vidak – R) 11.1 AD 56 (Garcia – D) 11.3

8 California MSAs in the 10 Worst Unemployment Rates Nationally

While employment continues to improve in parts of the state, other portions of California continue to experience some of the worst unemployment rates in the nation.  Of the 10 Metropolitan Statistical Areas (MSAs) with the worst unemployment rates nationally, 8 are in California.  Of the 20 worst, 12 are in California.

US Rank MSA Apr 2016 Unemployment Rate
364 Salinas, CA Metropolitan Statistical Area 7.5
364 Santa Cruz-Watsonville, CA Metropolitan Statistical Area 7.5
364 Wheeling, WV-OH Metropolitan Statistical Area 7.5
370 Rocky Mount, NC Metropolitan Statistical Area 7.6
370 Vineland-Bridgeton, NJ Metropolitan Statistical Area 7.6
372 Beckley, WV Metropolitan Statistical Area 7.8
372 Farmington, NM Metropolitan Statistical Area 7.8
374 Stockton-Lodi, CA Metropolitan Statistical Area 8.1
375 Weirton-Steubenville, WV-OH Metropolitan Statistical Area 8.2
376 Yakima, WA Metropolitan Statistical Area 8.4
377 Modesto, CA Metropolitan Statistical Area 9.0
378 Fresno, CA Metropolitan Statistical Area 9.7
378 Madera, CA Metropolitan Statistical Area 9.7
378 Yuba City, CA Metropolitan Statistical Area 9.7
381 Hanford-Corcoran, CA Metropolitan Statistical Area 10.0
382 Bakersfield, CA Metropolitan Statistical Area 10.6
383 Visalia-Porterville, CA Metropolitan Statistical Area 10.8
384 Ocean City, NJ Metropolitan Statistical Area 11.1
385 Merced, CA Metropolitan Statistical Area 11.2
386 Yuma, AZ Metropolitan Statistical Area 18.7
387 El Centro, CA Metropolitan Statistical Area 20.1

Manufacturing Remains Leading Source of Employment for Immigrants to California

Labor force availability is an emerging challenge to many developed economies—including many states in the Northeast and Upper Midwest—stemming from demographic shifts due to aging populations combined with lower birth rates.  California, on the other hand, has long benefited from being a prime destination for immigration, in the past through immigration from other states and ongoing through immigration from other nations.  This situation has provided a continuous flow of new labor force entrants, at times with the skills in short supply within the existing labor force and lacking under development within the state’s school systems.

The significance of this labor force factor, however, varies widely across California’s industries.  Through an analysis of the Current Population Survey data, the following figure shows the relative distribution by industry for workers by nativity, based on their reported main job.  The data compares workers who are US citizens by birth to workers who are foreign born, including both foreign born who are citizens by naturalization and those who have not yet become citizens.

As indicated, Manufacturing is the dominant source of employment for California’s immigrant population.  In absolute numbers, it is by far the largest, accounting for over 800,000 workers.  In relative terms, immigrants constitute 45.7% of all workers within Manufacturing, the third highest concentration behind the considerably smaller total number of workers found in Private Household Workers (64.9%) and Agriculture (58.3%).  The Manufacturing concentration ratio has also been relatively stable, ranging from 45.8% in 2004 to 49.0% in 2008.  Government (Public Administration), in contrast, reports far fewer both in terms of total numbers and the second lowest concentration ratio at only 16.4%.

Historically, manufacturing has played a key role in upward economic mobility in particular for blue collar workers, and these results indicate it continues to perform this function in a significant way for California’s immigrant population.  In the most recent 4-quarter average, Manufacturing paid $82,900 annually in wages, compared to only $33,900 for the second largest (Retail Trade) and $21,400 for the fourth largest (Accommodation & Food Services) sources of jobs for the immigrant population in 2015.

Manufacturing’s ability to continue providing these gateway opportunities for future immigrants, however, remains under challenge.  The continuing regulatory barriers to employment flexibility, increasing industrial energy prices stemming from the state’s energy policies, high tax rates both for corporations and even higher for pass-through business forms, increasing regulatory burdens, and declining skills training in the state’s schools represent ongoing competitiveness challenges that are reflected in declining employment levels overall in this industry.  Overall, Manufacturing remains nearly 200,000 employees below the pre-recession levels.

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