Explaining Southern California's economy

CHART: January jobs report: US adds 157,000 jobs, unemployment rate goes to 7.9 percent

Walmart hiring

KPCC

Daniel Vera, assistant manager at the Altadena Walmart Neighborhood Market, greets job seekers at the "Hiring Altadena" event.

The Labor Department released its January jobs report Friday. The country added 157,000 jobs for the month and the unemployment rate went to 7.9 percent from December's 7.8 percent.

In the words of the Bureau of Labor Statistics' economists, the situation was "essentially unchanged" from last month.

The 157,000 number was lower than what payrolls processor ADP reported earlier as well as what economists surveyed by Bloomberg were expecting. However, it was in line with the pace of job growth in the U.S. over the past 12 months.

The economy can tread water with sub-200,000-per-month job growth. To really drive the unemployment rate down to what economists call "full employment" — an unemployment rate of around 5 percent — the economy would need to add 300,000-to-400,000 new jobs each month.

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January jobs preview: We could be facing an ugly number

A jobs sign hangs above the entrance to

KAREN BLEIER/AFP/Getty Images

A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC.

Friday morning, the Labor Department will release its jobs report for January. I'll be up at the crack of dawn in Southern California to write up the numbers when they hit, so join me in the darkness with a big cup of coffee or three.

The current U.S. unemployment rate is 7.8 percent. Private payrolls processor ADP, which generates an employment report ahead of the Labor Department, said that the country added 192,000 jobs in January.

Economists surveyed by Bloomberg expect 185,000. Both numbers are higher than what we wound up getting, on a preliminary basis, from the official government data in December: 155,000.

If ADP and the Bloomberg economist brain trust are right, then we're off to a decent start for 2013 — although to really push the unemployment rate lower in a hurry, we need to add 300-400,000 new jobs each month. 

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CA unemployment rate holds steady at 9.8 percent in December

Justin Sullivan/Getty Images

A job seeker pauses as he fills out an application during a job fair in Northern California.

California's unemployment was unchanged from November at 9.8 percent, the Labor Department reported Friday.

Since December 2011, however, California has experienced a substantial drop in its jobless rate, from 11.2 percent. Over that period, the state added 225,900 new jobs, second only to Texas, with 260,800.

So why didn't California's unemployment rate drop more in December? Because the state earned the dubious honor of losing the most jobs of any U.S. state: 17,500. This reverses a trend of California adding jobs at a decent clip, a highlight in an otherwise sluggish recovery.

California's unemployment rate remains a full two points higher than the nation's 7.8 percent.

In December 2012, sectors that shed jobs in significant numbers were professional and business services and trade, transportation, and utilities. Construction actually saw modest gains, an indication that the housing recovery in the state isn't losing momentum.

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California adds jobs at a faster pace than the US, can look forward to a housing recovery

Home Building

Paul Sakuma/AP

Construction workers build a home in Palo Alto, Calif. A real turnaround seemed to take hold in the housing sector in 2012 after years of fits and starts.

The U.S. added 155,000 new jobs in December, the Labor Department reports. But California and Los Angeles County have been adding jobs at a faster rate than the country as a whole —  in an important industry: construction.

Through November, California added jobs at a 1.9 percent pace and L.A. County nearly matched that, at 1.8 percent. The U.S. is adding jobs at a 1.4 percent pace, said Kimberly Ritter-Martinez of the Los Angeles County Economic Development Corporation in an interview after the national jobs report surfaced Friday morning.

For December, the U.S. added 30,000 jobs in construction. That trend could benefit California, where Ritter-Martinez said she’s seeing a looming housing shortage. She expects that a recovering housing market will be a source of growth in 2013. A number of economists and market observers already maintain that there's a housing inventory crunch in California, is driving up prices and inducing homebuilders to start nailing two-by-fours together again.

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December jobs report: Did the U.S. economy add more than 200,000?

A jobs sign hangs above the entrance to

KAREN BLEIER/AFP/Getty Images

A jobs sign hangs above the entrance to the US Chamber of Commerce building in Washington, DC.

I don't have quite as much time as usual to look forward to the December jobs report the federal Labor Department will issue bright and early Friday at 5:30 a.m. West Coast time.

But I can run through what I think the number will be. 

For the record, in November the U.S. added 146,000 new jobs, while the unemployment rate fell to 7.7 percent.

On Thursday, ADP, a private payrolls processor, reported that the U.S. added 215,000 jobs in November. A consensus of economists Bloomberg surveyed expects 155,000 new jobs and anticipates that the unemployment will rise slightly, to 7.8 percent (probably because optimism about employment will bring people back to the job hunt, raising the labor participation rate, now at lows not seen since the early 1980s).

The economy itself is a mixed bag. Retail sales, for big players like Target and Barnes & Noble, were weak during the holiday season (although the jury is still out on whether the entire season was a major disappointment). But the U.S. economy expanded at a stronger pace in the third quarter than previously thought, suggesting that a very sluggish recovery from the Great Recession could be gaining steam.

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