California’s unemployment rate dropped below 5 percent last month, reaching the lowest point in a decade, state officials announced Friday.
Statewide unemployment fell to 4.9 percent in March, down one-tenth of a percent from February, the Employment Development Department reported. In the four-county Sacramento region, the unemployment rate was 5.0 percent, also down one-tenth of a percent.
More significantly, California continued to lead the nation in job growth, with its 19,300 new jobs accounting for nearly 20 percent of the 98,000 created in the United States. The U.S. unemployment rate stood at 4.5 percent for March.
“Some thought that job growth would slow, but so far in early 2017, strong job growth has continued in California,” said Michael Bernick, a former director of the Employment Development Department. “Our job growth is outpacing the national rate.”
He added, “It’s one of the lowest rates we’ve had in the past 40 years. This is good news, no question.”
While economists hailed the latest figures as signs that the economy is still healthy and growing, they cautioned that the state was closing in on full employment and that future job gains would be much smaller.
Sung Won Sohn, a professor of economics at California State University, Channel Islands, estimates that full employment would be achieved at 4.5 percent, a figure he said would be difficult to reach.
“It’s going to get tougher to create jobs,” Sohn said, adding that the high cost of living in California was forcing small and expanding businesses to relocate elsewhere.
The Sacramento region saw a gain of 5,500 jobs in March, compared to 5,700 in February. Economist Jeff Michael of the University of the Pacific said the area’s employment growth has slowed down over the past six months. Construction, a bright spot for the state, has lagged locally as builders hold off on new home construction even as resale prices and rents have soared.
“We haven’t seen much of a surge here,” said Michael, director of UOP’s Center for Business and Policy Research. “The demand hasn’t been as strong compared to coastal areas.”
Aerojet Rocketdyne Inc. announced this month that it would relocate or eliminate about 1,100 of its 1,400 local jobs over the next 2 1/2 years and shut down manufacturing operations in the area. The company also said it would close its facility in Gainesville, Va. The 300 employees who will remain in Rancho Cordova will work in finance, legal, personnel and other departments, company spokesman Glenn Mahone said.
Jason Sisney, chief deputy at the state Legislative Analyst’s Office, warned that the federal government’s policies on health care and immigration may adversely affect the state in the near term. The technology and agriculture sectors, for instance, rely largely on immigrant labor, while federal cutbacks to health insurance could threaten the booming medical industry.
“Whether or not the federal government will change those policies remains highly uncertain. We’re still waiting for Congress and President Trump,” Sisney said.