California’s Job Growth Remains Steady in March

Employment growth in California remained solid last month, although hiring by companies overall slowed a bit from last year’s robust pace, according to government surveys released Friday.

Officials said the state’s jobless rate rose last month to 5.8%, from 5.6% in February. Analysts were not concerned about that one-time increase, attributing it largely to volatile changes in the labor force, especially at a time when many more people are entering or reentering the job market to take advantage of the strong economy.

In recent months, job gains have been especially strong among minorities, whose unemployment rates have fallen sharply and are now within a percentage point of the rate for whites in California. That is especially true in regions with an exceedingly taut labor market, such as Orange County.

In March, Orange County’s jobless rate declined to 2.6%, from a revised 2.8% the previous month. That rate, although not seasonally adjusted, is the second lowest this decade.

The county’s total payroll employment last month stood at 1.32 million--up 3.6% from a year earlier. That is a slower rate of growth than the sizzling 5% pace of last year, but still very robust. As was the case statewide, the big services sector--from hotels and engineering firms to software developers--led the payroll gains last month in Orange County.

The jobless rate for Los Angeles County declined in March to 6.4%, from 6.5% the previous month. The county saw moderate job growth last month. Employment in business services grew by more than 5,000 jobs in the same period, but the motion pictures industry declined by about that much.

The number of job grew last month in Ventura and the combined San Bernardino-Riverside counties at an annual rate of 4%, compared with 3% for the state. Unemployment rates dropped notably for all of those areas.

Statewide, however, Friday’s reports pointed to some possible signs of slowing. The March survey of California households suggested that the pace of layoffs has increased. It was the second month in a row in which job losers made up a noticeably bigger share of the state’s 950,000 unemployed people. Even so, those laid off are finding new jobs fairly quickly.

By the household survey, the number of Californians holding jobs increased by a robust 47,000 in March, to a record 15.6 million. That includes the self-employed and family members who are helping out, whether they are paid or not.

But the government’s separate survey of employers, generally considered more reliable, indicated that hiring by payroll employers was considerably smaller. That survey showed that the state added 18,100 jobs in March, most of them in service industries. Construction was flat for the second month in a row, and manufacturing shed another 3,000 jobs last month, half of them in aerospace.

For the first quarter, payroll employers in California have produced an average of 23,000 new jobs a month. That is a solid rate of growth, but well below the 37,000 jobs added on average each month last year.

Still, economists were not ready to say a notable slowdown was in the offing, largely because other reports indicate that the state’s economy is roaring ahead.

The Department of Finance, for example, has reported that state income tax withholding was up a whopping 17% in March and 13% for the entire first quarter. Although some of that may be from taxes on stock options, it’s likely that the increase reflects continued strong employment gains.

Moreover, the Employment Development Department’s monthly survey of employers taps a relatively small sample of large companies, often shortchanging hiring by small firms and start-ups. A Wells Fargo survey in the first quarter of 465 small businesses throughout California found that optimism and hiring plans have picked up in the state this year from late last year.

“Growth may be imbalanced, but it’s solid,” said Wells Fargo economist Don Hilber, referring to the decline in manufacturing and the continued strong expansion by services.

Indeed, in the first quarter, the sprawling services sector in California added an average of 20,000 jobs a month--almost double last year’s pace. Much of the growth this year has come from business services, including software and computer services, which are getting a boost from corporate America’s rush to fix the year 2000 computer problem.

Howard Roth, economics director at Investment Research Co., an investment management firm in Rancho Santa Fe, said he was baffled by California’s smaller job-growth numbers in the last couple of months--but not worried.

“The U.S. economy continues to do pretty well, and we’ll track that,” he said.

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Jobless Drop

Orange County’s March unemployment decreased to 2.6% from February’s 2.8%. The 15-month trend:

January 1998: 3.1%

March 1999: 2.6%

Source: Employment Development Dept.