The contrast is striking: California's broad-based economic recovery has driven unemployment to its lowest level in nearly four years, but Sacramento is losing another blue-collar industrial mainstay.
State officials reported Friday that California unemployment dropped to 10.1 percent in October amid a fresh surge in job growth in multiple sectors of the economy. The state's top economist said the state is creating jobs at a pace not seen since early 2001.
Yet in Sacramento, the news was overshadowed by Hostess Brands Inc.'s announcement that it's going out of business in the face of a devastating strike.
The closure will eliminate 300 jobs in the region, most at the company's bread factory on Arden Way in an industrial district behind the Capital City Freeway. The announcement came just weeks after Campbell Soup Co. said it will close its Sacramento plant next summer.
Hostess and Campbell have something crucial in common: They provide solid middle-class wages for blue-collar Sacramentans. Hostess workers earn about $18 to $19 an hour plus benefits.
Even as the economy gains momentum, those types of jobs are becoming rarer. It will be hard for Hostess workers to find new jobs with "comparable pay and benefits," said Michael Bernick, a former director of the California Employment Development Department.
"Hostess is a big story, just like Campbell was," said Bernick, a research fellow with the Milken Institute. "They're part of the same thread."
The Hostess and Campbell layoffs will show up in future unemployment data. For now, the latest jobs report suggests the Sacramento economy is in a bit of a holding pattern after several months of encouraging growth.
Sacramento's unemployment rate rose a tenth of a point in October, to 9.8 percent. The region added 100 jobs during the month.
That was just a sliver of the job growth Sacramento enjoyed in September, when payrolls expanded by 2,400 and unemployment fell below 10 percent for the first time since January 2009.
The ho-hum October results were driven by seasonal factors. The public sector added jobs as teachers continued returning to work. Those gains were offset by cutbacks at hotels and restaurants.
"Summer season's over," said Justin Wehner, a labor market consultant with the EDD. "There's less money being spent in hotels and restaurants."
On the statewide level, the results were more clear-cut.
While there are plenty of potential speed bumps out there including the slowdown in China and Europe and the "fiscal cliff" issue in Washington California's economy is strengthening after a late summer lull.
Employers added 45,800 jobs in October and unemployment fell a tenth of a point, to 10.1 percent. Unemployment is the lowest it's been since February 2009, when the recession was raging.
"The state as a whole is now in recovery from the deep recession of recent years," said Stephen Levy of the Center for Continuing Study of the California Economy, in a note to reporters. "Job growth strengthened outside the Bay Area and broadened beyond the tech sector."
Dennis Meyers, principal economist at the state Department of Finance, said hiring is taking place throughout the private sector.
California has added an average of nearly 32,000 jobs a month the past six months. That's the fastest pace since March 2001, he said. "We're getting back into a pre-recession pace," he said.
The economic recovery couldn't save Hostess, however. Like Campbell Soup, the company has been hurt by changing consumer tastes. Although it still does fairly well with snacks such as Twinkies, its brands of bread including Wonder face intense competition, said Bill Bishop of Willard Bishop Consulting in suburban Chicago.
Hostess filed for bankruptcy protection in January. After failing to persuade striking members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union to return to work, the company said Friday it will liquidate.
Outside the Sacramento plant, which made bread under the Wonder, Nature's Pride and Home Pride labels, the picket line took on a somber cast Friday. Two dozen members of bakers' Local 85 huddled under ponchos in the mist. Makeshift wood fires burned in metal containers as delivery trucks sat parked.
The union defended its refusal to swallow the latest wage and benefit cuts demanded by Hostess.
Marty Zimmerman, secretary-treasurer of Local 85, said workers have endured two rounds of concessions, while executives "have enriched themselves with pay increases and bonuses."
Peter Schaub, a marketing and branding expert in New York, said it's possible some of Hostess' operations could survive the liquidation.
"I know not everyone loves Twinkies, but I'm guessing there are enough people who do to make it interesting," Schaub said. "That brand certainly has some value."
In an interview with CNBC, Hostess Chief Executive Gregory Rayburn offered little hope to employees even though the company will try to sell some brands.
"This industry is over capacity," he said. "Our competitors have more capacity than they need; we have more capacity than we need."