California job trend points to gradual growth; Sacramento jobless rate up slightly

03/10/2012 12:00 AM

03/12/2012 9:21 AM

The national economy continues to churn out jobs, and California's unemployment rate is at its lowest level in nearly three years.

In a further sign of an expanding U.S. economy, employers created 227,000 jobs across the country in February, the Labor Department reported Friday. It was the third straight month that job growth topped 200,000.

Unemployment was unchanged at 8.3 percent. But economists said the reason was that more Americans, hearing that things are getting better, resumed looking for work. By flooding the job market, they kept the unemployment rate from falling.

"This is very typical when the economy is improving. A lot of people who were discouraged come back to the labor force," said Sung Won Sohn, an economist at California State University's Channel Islands campus in Camarillo.

Most sectors of the economy showed strength, including manufacturing, health care and leisure and hospitality.

"Good solid numbers," said Chris Thornberg of Beacon Economics consulting firm in Los Angeles. "It shows an economy moving forward."

California showed fresh signs that it's heading the same way. Statewide unemployment fell three-tenths of a percent in January, to 10.9 percent, the state Employment Development Department said.

It's the first time the state rate has been below 11 percent since April 2009, during the depths of the recession.

Sacramento's unemployment rate edged back up to 11.3 percent, an increase of four-tenths of a point. But analysts said the setback, following a few months of encouraging news, was caused by seasonal trends. Layoffs were concentrated in sectors like retail and construction, where business in January is traditionally slow, said EDD consultant Justin Wehner.

While Sacramento is still struggling with double-digit unemployment, many coastal regions are doing far better. High-tech centers like the Bay Area and parts of Southern California have seen unemployment fall to 8 percent or lower.

"The strength of the recovery is very, very concentrated in San Francisco, Santa Clara, Orange and San Diego," said Stephen Levy of the Center for Continuing Study of the California Economy. "The places that rely on construction and government haven't moved the needle very much."

Even as statewide unemployment fell in January, the news wasn't all positive.

Payrolls in California actually shrank by 5,200 jobs, the EDD said, suggesting the economy went backward.

The payroll statistics left economists puzzled. Those figures are based on a different survey than the unemployment rate. Usually, economists rely on the payroll survey. But this time, they say they are putting more faith in the unemployment rate, which is declining.

California is "participating in this slowly strengthening recovery," Levy said.

He and others noted that job growth has been gaining strength in California the past several months. And with the nationwide job market on an upward trajectory, Levy said it's hard to believe California lost jobs in January.

The EDD on Friday also released revised job numbers for 2010 and 2011. The numbers showed that 2010 was stronger than previously believed, but the economy didn't generate as many jobs in 2011 as originally reported.

All in all, state officials said the numbers suggest the job market is expanding.

"It's kind of mixed news but overall positive," said Dennis Meyers, senior economist with the state Department of Finance. "We're still on this path to a modest recovery."

Many other indicators also suggest the state's economy is moving up. Thornberg said personal incomes are growing at a pace not seen since before the recession hit in late 2007. The Board of Equalization reported Friday that taxable sales grew an estimated 7 percent in the last three months of 2011 compared with 2010.

At 11.3 percent, Sacramento's unemployment was considerably lower than a year ago. But job growth has yet to catch fire the way it has in some other parts of the state.

"It's improved, you can start to see the silver lining," said Donna Bland, chief executive at Golden 1 Credit Union. "But it's going to be a long go."

The financial services industry is among those finally growing again in the Sacramento area following a lengthy slump; employment is up 1.5 percent from a year ago. Bland said Golden 1 is expanding its Sacramento-area staffing slightly this year.

There are other pockets of growth in the region as well. RagingWire Data Centers last month lined up $140 million in financing to expand operations in Sacramento and Virginia. The company expects to add 25 jobs in Sacramento over the next year.

But for many job seekers, the wait for an opening remains long.

"It's hard, it's very hard, to find a job right now," said Morena Holmes, 40, who was perusing the job listings Friday at EDD's office on Broadway in Sacramento.

The Rancho Cordova resident has been out of work since June, when she had a fast-food job, and has been looking for part-time work while she goes to school.

"It is really getting better?" she asked. "I don't think it is."

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