4 signs California’s job market is cooling
Have California bosses changed their hearts about hiring?
After six straight years of job gains, 2017 started with the slowest employment upswing since the first year of the recovery from the Great Recession.
Using data from the state Employment Development Department and the U.S. Bureau of Economic Analysis, here are four reasons behind the cooling.
No. 1: Fewer layoffs
California bosses have a low-risk way to keep payrolls up: skip the pink slips!
Just look at initial unemployment claims, seen as a snapshot of how many employees have recently lost their jobs. State employment counters report that in the year ended in February, 2.35 million unemployment claims were made.
That may sound like a like of layoffs but it’s actually historically small.
For starters, it’s the slowest annualized pace of Californians filing for jobless claims since December 2007.
Compared to the statistical norm, claims are running 19 percent less than the average annualized rate of 2.92 million since 1978.
Plus, recent layoffs are 25 percent below the cyclical peak of 3.12 million reached in September 2014.
No. 2: Less hiring
Fewer job cuts suggest bosses at least have confidence in their current business plans.
But a slowdown in California job growth hints that businesses in the state may have some reservations about the future for economic growth. Thus, fewer hires.
Statewide job totals grew at a 1.9 percent annual rate in February, the lowest in five years. And while unemployment claims were falling at a 2.5 percent yearly rate in February, that drop looks thin compared to a 13 percent tumble a year earlier and a 7 percent decline in the year before that.
No. 3: Fewer options
Bosses may have fewer choices when hiring.
The year started with 1 million Californians statistically unemployed, down 1.2 million from 2010 and the lowest since 2007.
And in the 12 months ended in February, 17.1 million checks were handed out to Californians for jobless benefits, down 3 percent in a year and the second lowest reading since November 2007.
One caveat, though. Declining counts of the unemployed and benefit checks may signal that many unemployed folks are finding new work. But some of the drop could be folks giving up on the job hunt.
No. 4: Pay gains slow
Bosses stingy again? Another sign of a cooling job market: statewide per capita income.
The fourth quarter’s income jump of 3.9 percent above the previous year doesn’t sound too skimpy. But it was the third straight quarter of income growth under 4 percent after a previous hot nine quarters when income growth averaged 5.3 percent.
Just remember, less growth is still growth. But will the cooling turn into a deeper chill?