News Column

California Jobless Rate Unchanged in December at 9.8 Percent

Jan 21, 2013

Dale Kasler

California's economy appeared to hit the pause button last month, leaving the unemployment rate stalled.

Unemployment was unchanged at 9.8 percent statewide and in the Sacramento area, the Employment Development Department said Friday.

The numbers suggested a bit of a slowdown, thanks in no small part to a softening of the economy in China, Europe and other parts of the globe. California lost 17,500 jobs in December, and Sacramento-area payrolls shrank by 1,500.

It was "another lackluster month for job growth" after several strong reports during summer and fall, said University of the Pacific economist Jeff Michael in an email.

But analysts said they believe California's economy remains generally on the right track, having added nearly 226,000 jobs in the past year. The December report "is not a signal of anything," said Dennis Meyers, principal economist at the state Department of Finance.

Monthly payroll statistics are often revised, and several economists said they think the December numbers will eventually turn out better.

One factor depressing the results was a seasonal quirk. Retail hiring was surprisingly weak for a December -- just 200 jobs in the Sacramento area, for instance. In a more typical December, about 1,900 jobs are added, said EDD labor market consultant Justin Wehner.

The difference this time was that retailers got a head start on the holidays. November hiring was 50 percent above average.

"A lot of the retail hiring happened a month early," Wehner said.

Some sectors of the economy continue to rebound smartly. New car sales, which took a beating during the recession, increased 25 percent statewide last year, the California New Car Dealers Association said Friday.

The 1.6 million cars sold represented the best year since 2007, the association said.

But it's also true that job growth in general has slipped. A few months ago, statewide payrolls were growing at an annual rate of nearly 2 percent. Now the growth rate has slipped to 1.6 percent, just above the national average.

Several key industries have curtailed hiring, including wholesale trade and manufacturing. For example, California's factories eliminated 2,600 jobs in December and 11,400 jobs in the past year.

The latest figures suggest California's recovery is still proceeding unevenly.

Boosted by the tech sector, Bay Area payrolls have grown by 2.9 percent in the past year, about double the national average, according to Stephen Levy of Palo Alto's Center for Continuing Study of the California Economy.

Growth is much slower in the Central Valley, where there are fewer technology jobs and the housing market took a much harder fall.

Sacramento-area job growth in the past year totaled 1.3 percent.

Source: (c)2013 The Sacramento Bee (Sacramento, Calif.). Distributed by MCT Information Services.

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