Adding Jobs Is Only part of Improving the Unemployment Rate Across the Country

Eleven states added jobs last month—and California is one of them—but that does not necessarily mean that the employment rate is improving. For one, in California, the state added roughly 82,600 jobs but the unemployment rate still ticked up from 4.7 percent in June to 4.8 percent at the close of month number seven. Unfortunately, this is higher than the nationwide unemployment rate for July—which is 4.3 percent—but it is also still pretty low for the Golden State.

“We have a ‘steady as she goes’ economy,” explains Robert Kleinhenz, who is an economist with Beacon Economics and the UC Riverside School of Business. He adds, “It is safe to say that there is an ebb and flow in labor market conditions, especially from one month to the next.”

For example California payrolls are up by 1.7% in July compared with July of last year and economists argue that some of the July gains might have been a result of more school hiring as we approach the new school year. Still, government jobs saw an uptick of 18,800; education and health services saw an uptick of 18,600; leisure and hospitality saw an uptick of 15,200.

Now, an increase in leisure and hospitality is normal for this time of year, of course. But Pepperdine University associate professor of economics argues that similar jumps in other metrics shows “positive sign for the California economy.”

And it looks like former California director of state Employment Development, Michael Bernick agrees. Now an attorney with Sedgwick in San Francisco, he says, “We did slow down a couple months, but now these are very strong numbers. How long it can continue is difficult to say.”

Indeed, Bernick notes that this higher unemployment rate is “not uncommon” in parallel to an improving economy which might be encouraging people who had given up on looking for work to come out of their proverbial hiatus. He makes sure to also note that California’s labor force participation rate—measuring nearly 62 percent in June—is among the lowest it has been since the 1970s. That means, he attests, many adults who are not currently working could make a return to the labor market.

The other ten states to add jobs were: Florida, Pennsylvania, Arkansas, New Hampshire, Texas, Oregon, Illinois, North Dakota, Tennessee, and Alaska.

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