Explaining Southern California's economy

CA unemployment falls to 10.1 in October, state leads nation in new jobs

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The California unemployment rate fell to 10.1 percent in October from 10.2 percent in September, according to the Labor Department.

California added 45,800 new jobs in October, leading the nation, but the state's unemployment rate remains high. At 10.1 percent, California ranks third, behind Nevada and Rhode Island. The September unemployment rate was slightly higher, at 10.2 percent, the Labor Department reported.

So, progress, but slow progress. California's pace of job creation is impressive. Of the 171,000 new jobs the entire U.S. added in October, 27 percent were in California. And since the beginning of the year, California has added nearly 300,000 jobs, outperforming Texas by a decent margin and outpacing New York by more than 2 to 1. 

However, in a truly healthy recovery, the U.S. would be adding 300,000-400,000 jobs each month. And a lot of those jobs would be in California. So an overall sluggish rate of hiring is keeping the state's unemployment rate in double digits. 

The takeaway for Californians is that the state is close to breaking through the important 10-percent psychological barrier for its unemployment rate.  the state fell into a deep hole. It's taking a long time to climb out. If the "fiscal cliff" — the expiration of Bush-era tax cuts and government spending measures — can be avoided, California should drop into the 9-percent range next year. 

From there, it's just a question of whether some critical industries, such as construction, will pick up and accelerate an already solid pace of hiring in California.

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