California unemployment stays steady at 7.4 percent; Sacramento area inches up to same level
08/15/2014 9:48 AM
08/15/2014 10:16 AM
The job market continued its bumpy ride in California and Sacramento last month, with the region’s unemployment rate increasing while the statewide rate remained unchanged.
Unemployment in Sacramento climbed to 7.4 percent, rising a half percentage point, the state Employment Development Department said Friday. That equaled the statewide rate, which held steady with a gain of 27,700 jobs.
“It’s a fairly slow rate of growth,” said Irena Asmundson, chief economist at the California Department of Finance. “Clearly, we’d like to see a faster pace, but we’ll take what we have.”
Calling the statewide number a “pretty good sign,” Asmundson noted that the U.S. unemployment rate increased in July, to 6.2 percent. “Our gap narrowed,” she said.
Regionally, the unemployment rate fluctuated largely due to the seasonality of school employment, with a dip of 11,100 jobs in the four-county area of El Dorado, Placer, Sacramento and Yolo.
“It’s normal to see this time of year as schools trim down for the summer break,” said George Marley, an EDD labor market consultant. “If you were to discount that industry, you would actually see an increase for the month.”
Marley anticipated that those jobs would return by September when most schools are back in session.
Statewide job gains have cooled off in recent months from their peak in April, when 61,200 new jobs were created. Still, the 27,700 jobs added in July were better than the 16,200 new jobs reported in June.
Construction posted the single largest decline last month, down 6,400 jobs. The numbers suggest a slowdown in the housing market, which typically sees the most activity during the summer. The financial sector, which is closely tied with housing, shed 11,200 jobs.
Jeff Michael, an economist at the University of the Pacific in Stockton, said multiple factors, including weak demand in the housing market and rising interest rates, were contributing to the lack of construction jobs.
“(Construction) hasn’t been rebounding as strongly as economists predicted,” Michael said.
He added, “The financial sector continues to be weak; there’s not a lot of activity in mortgage refinancing.”
In Sacramento, professional and business services was the top industry gainer for the month with 2,000 jobs created, exceeding the 10-year average by 1,500 jobs.
Without the seasonal loss of school-related jobs, Marley said the region would have gained between 2,500 and 3,500 jobs for the month.
“If things continue the same way, we’re on pace to recover all the jobs lost in the recession,” he said. “The trend has been positive.”
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