Business & Real Estate

California unemployment falls to 7 percent; Sacramento area falls to 6.2 percent


California’s job market slowed down somewhat in December, with job growth coming to a reported crawl, but economists said the numbers don’t tell the whole story about the state’s economic strength.

The Employment Development Department said Friday that statewide unemployment fell to 7 percent, down two-tenths of a point from November, even though payrolls grew by a minuscule 700 jobs. In November, job growth was reported at a more robust 82,800, one of the strongest gains in years.

Sacramento-area unemployment dropped a half a percentage point, to 6.2 percent. But the payroll job figures were disappointing in the regional economy, too. Instead of job growth, payrolls actually shrank by 1,100 in the region, the EDD said.

The payroll figures and the unemployment rates are based on separate surveys. Sometimes the numbers don’t move in sync, and experts say it’s better to look at broader trends rather than focus on month-to-month fluctuations.

In that regard, they believe the job market is generally heading in the right direction.

“This is now clearly a solid and sustainable recovery led by sectors with good future growth prospects,” said Stephen Levy, of the consultancy Center for Continuing Study of the California Economy, in an email.

Nonetheless, Irena Asmundson, chief economist at the state Department of Finance, said she believes the California economy did pause a bit in December.

Part of the slowdown was due to the December rains, which hurt the construction market. In addition, many retailers ramped up for the holidays a month early, shifting a lot of hiring from December to November, she said.

“We know that retailers staffed up for the Christmas shopping season earlier,” she said.

State officials also revised downward the November hiring figures. They had previously said the state added 90,100 jobs, not 82,800.

Despite the December slowdown, Asmundson said the economy is still making strides. For instance, the “professional and business services” sector, which takes in a wide swath of the economy, added nearly 111,000 jobs during the year, about a third of the statewide job gains.

That sector takes in “quite a lot of the jobs in Silicon Valley,” she said.

In Sacramento, meanwhile, about 18,000 jobs have been added in the past year, a 2 percent growth rate. Nearly one-third of the job growth came from professional and business services. State government, fueled by rising tax revenue, has added 3,100 jobs in the region since December 2013.

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