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Straight Talk
August: Mixed Month for Job Creation in California

From our company chief economist, Selma Hepp

  • After incredible job growth in July, which rose to 84,500 positions, August data from the California Employment Development Department was mixed, showing a decline of 8,200 jobs. However, there are some discrepancies between the overall state number and California’s combined metropolitan area numbers, which showed an increase of about 15,800 jobs in August.
  • Over the last 12 months, California has added about 265,000 jobs, a 1.8 percent increase that outpaces the national growth rate of 1.4 percent. Nevertheless, as this year’s numbers so far have indicated a slowdown in job growth from previous years.
  • California’s unemployment rate increased slightly to 5.1 percent in August, largely due to a sizable addition of 31,600 new workers to the labor force. This is the largest monthly increase since the spring of 2010. Despite the 0.2 percent year-over-year increase, California’s job markets remain tight.
  • Sectors that gained jobs in August include services, which encompass personal care services and equipment and machinery care. The manufacturing, retail, trade, and health care sectors also added jobs. Interestingly, some industries are reversing previous trends. For example, data shows strong performance for manufacturing and retail jobs, which had been trending down so far this year.
  • Sectors that lost jobs in August included leisure and hospitality, another reversal of previous positive increases. Despite the one-month dip, year-over-year growth levels for this industry remain positive, showing an increase of 39,500 positions. Other notable declines were in government; educational services; and professional, scientific, and technical services. The latter now shows a 0.4 percent jobs decline for the year, which could be concerning since it’s the higher-wage segment of the labor market. The government and educational services sectors are still in the positive and show strong year-over-year increases.
  • Los Angeles County added 8,300 jobs, with the largest increase in the government sector. Most of the growth was in local government, while state and federal government jobs declined. The professional and business services sector saw notable gains, along with the trade, transportation, and utilities; construction (up 1,300); and other services sectors. The information sector also posted a strong increase. Like other metro areas, Los Angeles’ leisure and hospitality industry posted the largest month-over-month decline, with 67 percent of the decrease in accommodations and food services.

Selma Hepp is the Chief Economist and Vice President of Business Intelligence for Compass. Her previous positions include Chief Economist at Trulia, senior economist for the California Association of Realtors, and economist and manager of public policy and homeownership at the National Association of Realtors. She holds a Master of Arts in Economics from the State University of New York (SUNY), Buffalo, and a Ph.D. in Urban and Regional Planning and Design from the University of Maryland.

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