Thaddeus Miller /

About 170 people, including 65 veterans, gathered at the American Legion Hall in Merced to speak with employers at a job fair.

California unemployment rate falls to 2008 levels

Published: Friday, Jun. 20, 2014 - 9:22 am
Last Modified: Wednesday, Jun. 25, 2014 - 8:04 am

Unemployment dropped in California last month to levels not seen since the days before the economic meltdown in 2008.

The statewide unemployment rate in May fell two-tenths of a percentage point, to 7.6 percent, the state Employment Development Department reported Friday. It was the lowest level since August 2008, a month before Lehman Brothers filed for bankruptcy protection and the stock market crashed.

Sacramento unemployment fell four-tenths of a point, to 6.7 percent. That marked the first time since June 2008 that unemployment in the region was below 7 percent.

California’s payroll job growth, which is calculated from a different survey than the unemployment rate, was 18,300 during May. While that was much milder than the April job growth of 61,200, economists called it a reasonably strong performance for the state’s economy.

“I would consider it pretty good progress,” said economist Jeff Michael of the University of the Pacific. He said California’s job growth rate in the past year is a healthy 2.3 percent, translating into 340,200 new jobs since May 2013.

Irena Asmundson, chief economist at the state Department of Finance, said month-to-month job growth has been choppy throughout 2014, but for the most part the state’s economy continues to expand. “I’ll take that,” she said. “As long as we’re improving.”

Asmundson said the most recent numbers also show California gradually closing the gap with the rest of the country, after suffering a disproportionate share of the national job loss when the real estate market collapsed. California unemployment is 1.3 percentage points higher than the U.S. rate of 6.3 percent, the smallest gap since May 2008. During the worst of the job-market downturn, in 2010, the gap was frequently at 2.5 points or worse.

One surprising number: California’s reported farm employment in May was actually 7.6 percent higher than a year ago, a gain of 29,200 jobs. That flies in the face of economists’ predictions that growers would scale back their hiring this year because of the drought. Thousands of acres have gone unplanted this year.

Asmundson said farm employment can be difficult to measure accurately. But she added that growers may have hired additional workers this year to rip out orchards, install new irrigation systems or make other drought-related adjustments.

In Sacramento, job growth for May came to 6,200. The biggest growth sector was the leisure and hospitality industry, with 1,800 jobs. While May is usually a good month for hiring in that industry, this was the biggest increase since 1990.

In the last 12 months, payrolls in Sacramento have grown at a 2.3 percent rate, matching the statewide average.

Two main pillars of the Sacramento economy reported sizable year-over-year increases. State government has hired 3,200 workers since last year, and construction contractors have increased their payrolls by 3,900.

“A lot of the traditional industries are waking up and adding jobs again,” Michael said.

The educational and health services field, which includes private education, added 1,300 jobs. That was the strongest increase for May since 2002. Almost all the improvement came in health care and social assistance.

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

Read more articles by Dale Kasler

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