Business & Real Estate

California, Sacramento employment figures contain inklings of an economic slowdown

Gov. Jerry Brown tells reporters at the Capitol that an economic downturn is coming. Unemployment figures released Friday showed a slowdown in job growth.
Gov. Jerry Brown tells reporters at the Capitol that an economic downturn is coming. Unemployment figures released Friday showed a slowdown in job growth. Sacramento Bee file

California job growth slowed to a crawl last month, state officials reported Friday, suggesting a slowdown in the economy.

Payrolls across the state grew by just 3,700 jobs in December, the Employment Development Department said.

The unemployment rate did fall a tenth of a percentage point, to 5.2 percent. But economists generally look at the payroll jobs figure, which is calculated from a separate survey, as a more reliable barometer of the economic climate.

 

“The cool air has begun to blow over the Golden State,” said economist Sung Won Sohn of California State University, Channel Islands, in a note to reporters.

It was the second straight month of modest job growth. Payrolls grew by just 12,900 jobs in November.

Sacramento’s unemployment rate was unchanged last month at 4.9 percent, even though payrolls shrank by 2,100 jobs in the four-county region. The public sector cut 4,200 jobs, a normal seasonal decline as schools closed for winter break. Construction jobs decreased by 3,400 as winter set in.

The December figures were released a week after Gov. Jerry Brown, introducing his budget proposal for the upcoming fiscal year, warned that California is facing a deficit of as much as $2 billion as tax revenue slows.

“The downturn is inevitable,” he told reporters at the Capitol last week.

Sohn said California’s economy is slowing down in part because the global economy is sputtering. That’s taking a particularly large toll on California’s tech sector, which has accounted for 40 percent of the state’s job growth in the past year, he said.

“The tech sector is definitely slowing down,” he said in an interview.

Ironically, he said another factor limiting job growth is that California is beginning to experience labor shortages in certain industries, including technology and construction. “There aren’t enough bodies to be hired,” Sohn said.

Dale Kasler: 916-321-1066, @dakasler

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