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Just the FACTS

The California Economy: Employment Update

  • California has recovered all of the jobs lost during the recession.
    June 2014 was a landmark month for California’s economy: five years after the official end of the Great Recession, California recovered all of the 1.3 million jobs it lost during the economic downturn. Five months later, in November 2014, nonfarm payrolls hit a new record of 15,650,500 jobs—1.3% higher than the pre-recession employment peak in July 2007. It is important to note, however, that the growth of the working-age population (and with it, the potential labor force) means that getting back to pre-recession levels is not enough. According to the UCLA Anderson Forecast, California employment will continue to grow slowly and steadily through 2016. Their latest quarterly report estimates employment growth at 2.4% in 2014 and 2.6% in 2015.
  • California’s job growth has slowed but is still stronger than the national rate.
    California is responsible for about 15% of all jobs added nationwide over the last couple of years, above its 12% share of the population. Job recovery in California has outperformed national job growth since March 2012, in part because the state experienced such a sharp plunge in jobs during the Great Recession. Between March 2012 and December 2013, California employment grew at an annual rate that was 1.1 percentage points higher, on average, than the national rate. The state’s employment growth decelerated in 2014, largely due to slower job growth in multiple services sectors. The gap between California and U.S. job growth has narrowed to only 0.3 percentage points.
  • The recovery has been led by four service sectors.
    The bulk (62%) of nonfarm employment gains between February 2010 and November 2014 occurred in four sectors: health care services (312,900 jobs added); accommodation and food services (224,900 jobs); professional, scientific, and technical services (200,200 jobs); and administrative and support services (203,000 jobs). The health care service industry added jobs during the recession (111,700) as did another service industry: educational services (4,500 jobs added).
  • Construction jobs are rebounding, manufacturing remains stagnant, and the government sector is a major drag.
    Even though construction employment is far below its pre-recession peak, on a percentage basis it has added jobs faster than any other industry. Between November 2011 and 2014, construction employment grew at an average annualized rate of 6.1%, while total nonfarm employment grew at 2.5%. This growth was spurred by increased housing demand, a decline of distressed housing inventory, strong pick-up in home prices, steady population growth, and positive expectations of homebuilders. There has been practically no job growth in manufacturing during this period, and the government sector has continued to be a drag on job growth in the state, averaging 0.5% annually.
  • The recovery has been uneven across metropolitan areas.
    Among California’s ten largest metropolitan areas, only five have regained all the jobs they lost during the Great Recession: Bakersfield/Delano, San Jose, San Francisco, Fresno, and San Diego. Some populous metros, such as Los Angeles, are close (90%) but others are lagging—for example, Sacramento has recovered only 71% of jobs lost. Employment gains have been heavily weighted toward the larger metropolitan areas along the coast. Between February 2010 and November 2014, California employment grew at an annualized average rate of 1.6%; job growth was strongest in San Jose (2.9%), Napa (2.4%), San Francisco (2.2%), and Bakersfield/Delano (2.1%).


Sources: U.S. Bureau of Labor Statistics, California Employment Development Department, Labor Market Information.

Authors

staffphoto-bohn.jpg
Sarah Bohn
Research Fellow
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Marisol Cuellar Mejia
Research Associate

Policy Areas

Economy

Contact

Sarah Bohn
Chart - Recovery has been uneven across metropolitan areas
Chart - The recovery has been led by four sectors