Jobs gains fuel California economic traction

Source: Sacramento Bee

The evidence keeps accumulating: California's economic recovery is gathering momentum. It's just nowhere near a boom yet.
Unemployment in California fell two-tenths of a point last month to 11.1 percent, the lowest level in nearly three years, the Employment Development Department reported Friday. Payrolls expanded for the sixth straight month, and economists pronounced themselves satisfied that the state is finally on the right track.
"We have sort of a nice string going," said Howard Roth, chief economist at the state Department of Finance. "This makes me more confident that it's not going to go away. … I think it's the real thing."
The growth in payroll jobs, which is considered the most reliable barometer of the job market, was a fairly weak 10,700 in December. That was offset somewhat by news that November's job growth was revised upward sharply.
Overall, Roth said, the results show the economy is mending but not operating at full throttle. "It's got to get a lot faster than this," he said. "But it looks like it has a good foundation."
Sacramento unemployment was unchanged at 10.9 percent. The region actually lost 3,700 jobs in December, a month that usually sees payrolls expand.
Nonetheless, economist Jeff Michael of the University of the Pacific said Sacramento's economy is still improving.
"These paths are not smooth," he said. "It's going to be a bit of a choppy pattern."
To a certain extent, December looked relatively weak in Sacramento because November was unusually strong. That was particularly true for retailers. After a better-than-expected surge of hiring in November, they added just 700 jobs across the region in December, less than half the usual amount, said EDD analyst Diane Patterson.
The dry December weather also kept the region's economy somewhat in check. Because of a lack of snow in the Sierra, the leisure and hospitality industry added just 300 jobs, well below normal, Patterson said.
Hiring at the ski resorts could finally start to pick up now that a long-awaited winter storm arrived this week.
Even with the December job losses, Sacramento has gained 6,100 jobs in the past year. The growth rate is well below the state's but suggests that Sacramento – held back for so long by troubles in housing and the public sector – is joining the recovery.
"Last winter was really the bottom for Sacramento," Michael said.
While Sacramento and other inland areas have lagged, coastal markets like San Jose, San Francisco and Orange County have been at the forefront of the recovery. The tech industry and manufacturing exports have been key drivers.
California has now added 240,300 jobs in the past year. That works out to a 1.7 percent growth rate, significantly above the U.S. average.
In another sign of the state's recovery, the California New Car Dealers Association said Friday that new-vehicle sales increased 9.9 percent in 2011. The association forecast an 8.5 percent gain for 2012.
Even though the state's payroll job growth was fairly weak in December, several experts said those figures might not fully represent what's happening out in the economy.
When an economic recovery starts to hit stride, as this one has, it's often accompanied by a surge in new startup companies. The firms, and their employees, don't get counted in the payroll data right away.
"It takes a while for the survey of firms to catch up," said Stephen Levy, director of Palo Alto's Center for Continuing Study of the California Economy.
He said it's no coincidence that in each of the past four months, the payroll figures have been revised upward the following month – sometimes dramatically. On Friday, officials at EDD said November job growth actually totaled 24,700. That's about four times as many new jobs as previously reported.
Levy said it's likely the December job growth, a mere 10,700, will be revised upward, too.
Sacramento tech startup HomeZada typifies the trend. Launched about a year ago, it likely won't show up in the state's monthly job data for a while.
HomeZada makes Web and mobile software to help homeowners track property documents, home-maintenance schedules – even contact information for long-forgotten carpet cleaners or appliance repairmen.
So far the company consists of its three co-founders, but it also employs several software developers and other professionals on a contract basis, said co-founder Elizabeth Dodson.
"We hope we're going to be very big," she said.

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