The Breakdown

Explaining Southern California's economy

California unemployment: Getting better, but the West still bad

43381 full
43381 full

The Labor Department released its June jobs report for U.S. regions and states this morning, and California topped an important list: The state added 38,000 jobs compared with May, more than twice as many as the next-best-performing state, Ohio. California's jobless rate also fell very slightly, to 10.7 percent from 10.8 percent.

However, California remains at the center of an unemployment crisis in both the West region and the Pacific division (the Bureau of Labor Statistic collects data for nine geographical divisions in the U.S.). The unemployment rate both in the West and the Pacific division are the highest in the U.S., at 9.4 percent and 10 percent, respectively. Nevada is in the worst shape of all the states, with unemployment at 11.6 percent.

For what it's worth, if you want a job in the U.S., the best state to be in is North Dakota, with a 2.9 percent unemployment rate. Exceptionally low joblessness there is being driven by an energy boom.

California's unemployment rate is dropping, but dropping very slowly. At this pace, it will take years to return the state to pre-financial crisis levels. But the fact that California is leading the nation in adding jobs is a positive sign. The entire country only added 80,000 jobs in June, so California accounted for nearly half that gain. 

We shouldn't be surprised. California has a nearly $2-trillion economy, with at least one major metropolitan area, the San Francisco Bay Area and Silicon Valley, where high-skilled workers with substantial education are in demand. Once the state gets moving, it can create jobs at a serious clip. Since last June, California has added almost 280,000 jobs, the best in the U.S. (But just to put that in perspective, that figure is actually below what the country needs to add in order to get back to "full employment" of 5-6 percent unemployment — for that we need 350,000-400,000 new jobs each month.)

That said, the state is really a collection of sub-regions. As we've seen from the recent bankruptcies of Stockton and San Bernardino, the inland areas are struggling to climb out of a very deep hole. Things look better on the coast, but Los Angeles is lagging the Bay Area. 

The sluggish pace of recovery in California is consistent with what many of the state's economists have been forecasting this spring. And if there's anything to seriously worry about, it's a downshifting in the national economy, with growth that may fall to anemic levels for the rest of the year. This has already started to happen, with U.S. first-quarter growth coming in at only 1.9 percent. In California, we should consider ourselves fortunate that with growth that tepid, we're managing to add jobs at all.

Follow Matthew DeBord and the DeBord Report on Twitter. And ask Matt questions at Quora.

blog comments powered by Disqus

Enjoy reading The Breakdown? You might like KPCC’s other blogs.

What's popular now on KPCC