A Bit of Good News
Original post made by stephen levy on Dec 17, 2011
The best news is that the unemployment rate fell to 11.3% from 12.5% a year ago. The number of unemployed residents dropped by more than 200,000 over the past year though 2 million residents are still unemployed.
And, unlike the nation where people dropped out of the labor force in November, California's unemployment rate drop occurred while the labor force increased.
The California story is still a tale of two economiesby geography and by industry.
Job growth remains centered in the urban coastal regions and in the technology, trade and tourism sectors. The San Jose and San Diego metro areas lead the large employment centers in percentage job gains. The San Francisco Area is close behind.
These areas are seeing a flurry of start-ups, IPOs coming to market, expanding exports and a rising level of optimism about the future. In the high tech centers of the Bay Area, vacancy rates are falling, rents are rising and new commercial building can be seen again.
Unemployment rates in the Bay Area are declining though still high by historical standards. The November unemployment rate for Santa Clara County was 9.1% down from 10.9% a year ago; 7.5% in San Mateo County down from 8.6% and 7.8% in San Framcisco down from 9.6%.
November did see the beginnings of job recovery in areas that had been lagging including the Sacramento region, the East Bay in the Bay Area, the Riverside-San Bernardino area and selected central valley counties.
The strong job growth sectors are a mixture of high wage jobs in professional, scientific and information services, and jobs in health services, food services and retail trade where more seasonal workers than normal were hired in November.
Manufacturing and construction lost jobs in November reversing earlier gains.
Job growth in November was modest (6,600) according to the payroll survey with an additional 11,900 jobs added to the October total. However, the household survey, which fluctuates from month to month but does include self-employed workers, recorded a gain of more than 100,000 jobs.
In contrast to the defense cut recession in the early 1990s and ther dot.com bust recession after 2000, this recession was caused more by temporary factors (the loss of 600,000 jobs related to the construction downturn) rather than permanent losses in the state's economic base. Technology, trade and tourism are on the upswing again and the recovery is ever so slowly broadening to other sectors except housing.
California has reached record export levels and the state captures 50% of national VC funding.
November's good news is tempered by the realization that there are still 1 million jobs to recover in California from before the recession and that the process of recovery is underway but still much slower than hoped for or needed.
And political gridlock in the state and nation together with economic turmoil and a likely recession in Europe provide headwinds for the state's now expanding economy.
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