11/16/2019

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May 2018 Jobs Report

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Highlights for policy makers:

Population Adjusted (jobs growth per 1,000 civilian noninstitutional population)

Unemployment Rate Level at 4.2%; Total Employment Loses 7,000

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

Seasonally Adjusted California US
May 2018 Change from Apr 2018 May 2018 Change from Apr 2018
Unemployment Rate 4.2% 0.0 3.8% -0.1
Labor Force 19,344,100 -0.1% 161,539,000 0.0%
Participation Rate 62.0% -0.1 62.7% -0.1
Employment 18,536,000 0.0% 155,474,000 0.2%
Unemployment 808,100 -0.9% 6,065,000 -4.4%
Source: California Employment Development Department; US Bureau of Labor Statistics

 

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

Not Seasonally Adjusted California US
May 2018 Change from May 2017 May 2018 Change from May 2017
Unemployment Rate 3.7% -0.7 3.6% -0.5
Labor Force 19,266,000 0.3% 161,765,000 1.1%
Participation Rate 61.7% -0.4 62.8% 0.0
Employment 18,554,500 1.0% 156,009,000 1.7%
Unemployment 711,500 -16.0% 5,756,000 -12.4%
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 7,000 from April, while the number of unemployed dropped by 7,400. The labor force eased by 14,400.

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 ease downwards for the third month in a row. California tied with Georgia for the 20th highest unemployment rate among the states. The unadjusted rate dropped from 4.4% in May 2017 to 3.7%. Contraction in the labor force was a key element in reaching the May low.

Total US employment saw a seasonally adjusted gain of 293,000 from April, while the number of unemployed dropped by 281,000. The national unemployment rate dipped to 3.8%, matching the record low in the current data series from April 2000. The national labor force remained essentially level with a gain of 12,000.

Labor Force Participation Rate Dips to 62.0%

California’s participation rate (seasonally adjusted) in May dipped 0.1 to 62.0%, while the US rate dipped by the same amount to 62.7%. The California rate is now only 0.1 percentage points above the revised series low from 2015.

Looking at the underlying unadjusted data for California, the May 2018 labor force is only 0.3% above the level in May 2017, with a total net gain of 52,700 over the year. In contrast, the US numbers show a significant rise in labor force entrants by 1,786,000 (1.1%), with the gains in employment (2,602,000) strongly outpacing the drop in unemployment (816,000).

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 a continued decline in the youth participation rate. 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 May 2018
Total 67.2% 62.2%
16-19 46.8% 27.1%
20-24 76.4% 65.9%
25-54 82.1% 80.0%
55-64 66.3% 63.8%
Prior Min
65+ 12.1% 19.6%
Source: Current Population Survey microdata; EDD
Note: All entries from 12-month moving average

State Employment Growth Rankings—California Still at #2

Change in Employment, May 2017 – May 2018
Rank Number of Employed Percentage Change Population Adjusted (employment growth per 1,000 civilian noninstitutional population)
1 TX 308,700 ID 2.9% CO 19.0
2 CA 199,900 CO 2.9% ID 18.1
3 FL 158,900 NV 2.6% UT 16.4
4 GA 123,000 GA 2.6% NV 15.5
5 CO83,400 AZ 2.4% GA 15.4
6 MA 81,000 UT 2.4% TX 14.6
7 AZ 76,800 TX 2.4% MA 14.5
8 NC 64,900 MA 2.3% DC 14.2
9 TN 59,100 NM 2.3% AZ 14.1
10 VA 55,600 LA 2.2% MN 12.6
11 MN 54,900 DC 2.2% LA12.4
12 WA 47,800 TN 1.9% NM 12.1
13 OH 47,200 MN 1.9% TN 11.2
14 IL 46,400 DE 1.8% DE 10.7
15 LA 44,500 OK 1.7% VT 10.1
16 WI 42,700 FL 1.6% OK 9.9
17 IN 38,000 VT 1.6% FL 9.4
18 UT 36,800 WI 1.4% WI 9.3
19 NV 36,300 NC 1.4% VA 8.4
20 OK 29,800 WA 1.4% WA 8.2
21 MI 28,100 VA 1.3% NC 8.1
22 OR 26,500 OR 1.3% OR 8.0
23 KY 26,500 KY 1.3% IN 7.3
24 ID 23,500 IN 1.2% SD 7.1
25 AL 21,300 RI 1.1% KY 7.1
26 NM 19,600 CA 1.1% RI 6.8
27 SC 13,800 SD 1.1% CA 6.5
28 DE 8,200 AL 1.0% NH 6.2
29 DC 8,100 ME 1.0% ME 5.9
30 NH 6,800 NH 0.9% AL 5.6
US 2,582,000 US 1.7% US 10.1
Source: US Bureau of Labor Statistics, Seasonally Adjusted

 

Between May 2017 and May 2018, Bureau of Labor Statistics (BLS) data shows the total number of employed in California increased by 199,900 (seasonally adjusted), or 7.7% of the total net employment gains in this period for the US. Based on the total numbers, California remained in 2nd place behind Texas (which has a civilian working age population only 69% as large as California’s) but ahead of Florida’s (55% as large) gains at 158,900. Measured by percentage change in employment over the year, California dropped to 26th highest. Adjusted for working age population, California dropped to 27th.

Nonfarm Jobs Up 5,500

EDD reported that between April and May 2018, seasonally adjusted nonfarm wage and salary jobs rose 5,500. April’s results were revised to a 25,600 gain from the previously reported 39,300.

In the not seasonally adjusted nonfarm numbers, hiring saw increases in all but 6 industries over the year. The change in total payroll jobs from May 2017 saw the largest increases in Construction (51,200), Social Assistance (39,500), and Professional, Scientific & Technical Services (34,200). Declines were in Other Services (-2,100), Wholesale Trade (-2,100), and Finance & Insurance (-2,000).

Not Seasonally Adjusted Payroll Jobs May 2018 Apr 2018 Change May 2018 – Apr 2018 Change May 2018 – May 2017
Total Farm 479,500 433,700 45,800 1,700
Mining and Logging 21,900 21,600 300 100
Construction 856,000 855,600 400 51,200
Manufacturing 1,318,000 1,312,900 5,100 10,300
Wholesale Trade 721,700 724,200 -2,500 -2,100
Retail Trade 1,680,700 1,679,400 1,300 10,500
Utilities 58,000 58,100 -100 -700
Transportation & Warehousing 579,800 576,500 3,300 20,800
Information 538,200 537,100 1,100 18,900
Finance & Insurance 546,000 547,500 -1,500 -2,000
Real Estate & Rental & Leasing 287,400 286,400 1,000 4,700
Professional, Scientific & Technical Services 1,254,700 1,257,600 -2,900 34,200
Management of Companies & Enterprises 233,000 232,300 700 1000
Administrative & Support & Waste Services 1,120,200 1,110,700 9,500 21,800
Educational Services 378,100 384,200 -6,100 6,700
Health Care 1,519,700 1,522,400 -2,700 23,300
Social Assistance 811,300 808,100 3,200 39,500
Arts, Entertainment & Recreation 316,000 310,400 5,600 4,700
Accommodation 230,100 229,000 1,100 4,700
Food Services 1,463,800 1,447,700 16,100 32,900
Other Services 565,400 562,300 3,100 -2,100
Government 2,630,900 2,618,600 12,300 31,200
Total Nonfarm 17,130,900 17,082,600 48,300 309,600
Total Wage and Salary 17,610,400 17,516,300 94,100 311,300
Source: California Employment Development Department

 

At a 306,000 increase, California dropped to 2nd highest measured by seasonally adjusted nonfarm jobs among the states from May 2017 to May 2018, behind Texas at 352,100. By percentage growth in jobs, California dropped to 14th highest at 1.8%, still above the US average of 1.6%. By population adjusted jobs growth, California dropped to 18th highest.

Change in Nonfarm Jobs (seasonally adjusted), May 2017 – May 2018
Rank Number of Jobs Employment Growth (%) Population Adjusted (jobs growth per 1,000 civilian noninstitutional population)
1 TX 352,100 UT 3.4% UT 22.2
2 CA 306,000 ID 3.1% ID 16.8
3 FL 180,200 WA 2.9% CO 16.6
4 NY 108,400 WA 2.9% NV 16.6
5 NC 99,600 NV 2.8% GA 16.5
6 WA 95,800 CO 2.7% TX 16.0
7 PA 78,200 AZ 2.5% MA 15.3
8 GA76,700 WV 2.3% DC 12.8
9 OH 76,200 NC 2.3% AZ 12.7
10 CO 72,800 OR 2.3% MN 12.4
11 AZ 69,900 FL 2.1% LA 11.7
12 IL 60,200 NH 1.9% NM 11.7
13 MI 57,800 SC 1.8% TN 10.7
14 NJ 57,200 CA 1.8% DE 10.3
15 MA 56,100 TN 1.8% VT 10.2
16 TN 53,400 HI 1.7% OK 10.1
17 VA 53,000 GA 1.7% FL 10.1
18 UT 49,800 KS 1.6% CA 9.9
19 OR 42,200 NM 1.6% SC 9.7
20 SC 38,400 MA 1.6% GA 9.6
21 NV 37,400 OK 1.5% SD 9.3
22 MO 34,300 RI 1.5% NE 9.2
23 IN 33,100 SD 1.4% RI 8.7
24 MN 30,000 NJ 1.4% OK 8.4
25 OK 25,300 MS 1.4% OH 8.3
US2,363,000 US1.6% US9.3
Source:US Bureau of Labor Statistics

4 Industries 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 May 2018 (not seasonally adjusted), 4 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 63,800 below the 2007 peak, and 110,300 (11%) below the previous high in 2006.

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 May 2018, lower wage industries accounted for about a quarter (24%) of new jobs, while middle class-blue collar jobs produced just over a quarter (27%) as Construction levels remain above prior years.

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

Two-Tier Economy Persists—Central Valley Unemployment Nearly Three Times 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 2.4% in the Bay Area to nearly three times as large at 6.9% in the Central Valley.

Not Seasonally Adjusted Unemployment Rate (%) May 2018
California 3.7
Bay Area 2.4
Orange County 2.6
Sacramento 3.3
San Diego/Imperial 3.4
Inland Empire 3.7
Central Sierra 3.8
Los Angeles 3.9
Central Coast 4.3
Upstate California 4.7
Central Valley 6.9

By Legislative District:

Lowest 10 Unemployment Rates
CD18 (Eshoo-D) 1.8 SD13 (Hill-D) 1.8 AD16 (Baker-R) 1.7
CD12 (Pelosi-D) 2.0 SD11 (Wiener-D) 2.2 AD22 (Mullin-D) 1.7
CD52 (Peters-D) 2.1 SD39 (Atkins-D) 2.2 AD24 (Berman-D) 1.9
CD17 (Khanna-D) 2.1 SD36 (Bates-R) 2.3 AD28 (Low-D) 1.9
CD14 (Speier-D) 2.1 SD37 (Moorlach-R) 2.3 AD17 (Chiu-D) 2.1
CD45 (Walters-R) 2.2 SD10 (Wieckowski-D) 2.4 AD77 (Maienschein-R) 2.1
CD49 (Issa-R) 2.2 SD07 (Glazer-D) 2.4 AD73 (Brough-R) 2.1
CD15 (Swalwell-D) 2.2 SD15 (Beall-D) 2.4 AD78 (Gloria-D) 2.1
CD48 (Rohrabacher-R) 2.4 SD02 (McGuire-D) 2.7 AD19 (Ting-D) 2.2
CD02 (Huffman-D) 2.5 SD34 (Nguyen-R) 2.8 AD25 (Chu-D) 2.2
Highest 10 Unemployment Rates
CD40 (Roybal-Allard-D) 4.6 SD33 (Lara-D) 4.6 AD03 (Gallagher-R) 5.3
CD09 (McNerney-D) 4.9 SD24 (de León-D) 4.6 AD64 (Gipson-D) 5.8
CD20 (Panetta-D) 4.9 SD30 (Mitchell-D) 4.8 AD13 (Eggman-D) 5.8
CD10 (Denham-R) 5.5 SD35 (Bradford-D) 5.0 AD23 (Patterson-R) 5.9
CD44 (Barragán-D) 5.6 SD05 (Galgiani-D) 5.3 AD34 (Fong-R) 6.1
CD23 (McCarthy-R) 6.5 SD08 (Berryhill-R) 5.5 AD21 (Gray-D) 7.8
CD22 (Nunes-R) 6.7 SD40 (Hueso-D) 6.2 AD31 (Arambula-D) 8.1
CD51 (Vargas-D) 7.3 SD16 (Fuller-R) 6.3 AD26 (Mathis-R) 8.2
CD16 (Costa-D) 7.8 SD12 (Cannella-R) 6.7 AD56 (Garcia-D) 8.3
CD21 (Valadao-R) 8.8 SD14 (Vidak-R) 9.4 AD32 (Salas-D) 9.2

Bay Area Provided 39.5% of Net Employment Growth Since Recession

Containing 19.4% of the state’s population, the Bay Area was responsible for 39.5% 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 20.3%. Inland Empire is the only other region—at a growing margin—continuing to show employment gains above their population share.

8 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, 10 are in California.

Metropolitan Area April 2018 Rate Rank
Brownsville-Harlingen, TX Metropolitan Statistical Area 6.2 368
Longview, WA Metropolitan Statistical Area 6.2 368
Modesto, CA Metropolitan Statistical Area 6.4 371
Yakima, WA Metropolitan Statistical Area 6.4 371
McAllen-Edinburg-Mission, TX Metropolitan Statistical Area 6.5 373
Vineland-Bridgeton, NJ Metropolitan Statistical Area 6.6 374
Watertown-Fort Drum, NY Metropolitan Statistical Area 6.6 374
Salinas, CA Metropolitan Statistical Area 6.7 376
Anchorage, AK Metropolitan Statistical Area 6.9 377
Fairbanks, AK Metropolitan Statistical Area 6.9 377
Madera, CA Metropolitan Statistical Area 7.3 379
Yuba City, CA Metropolitan Statistical Area 7.3 379
Fresno, CA Metropolitan Statistical Area 7.5 381
Hanford-Corcoran, CA Metropolitan Statistical Area 8.0 382
Bakersfield, CA Metropolitan Statistical Area 8.3 383
Merced, CA Metropolitan Statistical Area 8.7 384
Visalia-Porterville, CA Metropolitan Statistical Area 9.2 385
Ocean City, NJ Metropolitan Statistical Area 10.1 386
El Centro, CA Metropolitan Statistical Area 14.4 387
Yuma, AZ Metropolitan Statistical Area 15.7 388

 

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