Vol. 1, No. 1 (March 1998)
Issued June 2, 1998
Covering the period through March 1998

Next publication date: July 6, 1998

In This Issue

Employment Growth Substantial
California's seasonally-adjusted unemployment rate rose 0.1 percent in March to 6.0 percent, 0.1 percentage points higher than in February, but 0.4 percentage points below the level recorded a year earlier. About two-thirds of the state's counties and regions experienced annual declines in unemployment. (See RAND California Employment and Unemployment Statistics for up-to-date statistics on California and its regions.)

The lowest unemployment rates (not seasonally adjusted) occurred in the San Jose (Santa Clara County) and Orange County MSAs, where the rate fell to 2.8 percent in March. The highest unemployment rate occurred in Imperial and Colusa counties, both with a more than 20 percent jobless rate. Unemployment rates in the state's major regions are illustrated in Figure 1.

Figure 1
Major Region Unemployment Rates

Nonfarm employment in the state expanded 3.5 percent to nearly 13.5 million. Growth was particularly strong in construction (9.5 percent), services (4.9 percent), and wholesale trade (3.9 percent) (Figure 2). Employment fell in only one sector-mining—which accounts for less than 30,000 jobs statewide.

Figure 2
California Employment by Sector

About one-third of the increase in construction employment occurred in the Los Angeles Region. Growth was particularly strong in the Riverside-San Bernardino MSA. Construction employment growth was also strong in the Bay Area, the Sacramento and San Diego Regions, and the Fresno MSA (Figure 3).

Figure 3
Annual Increase in Construction Employment

Services continue to account for the largest share of employment growth in the state and in many of its regions. The number of service sector jobs grew by 196,000, accounting for more than 42 percent of the total increase in nonfarm jobs. Service sector employment increases were particularly strong in the San Francisco Bay Area (5.3 percent, including 5.8 and 5.6 percent in the San Jose and Oakland MSAs, respectively), the Riverside-San Bernardino MSA (5.6 percent), and the Ventura County MSA (5.1 percent).

One-half of the increase in service sector employment has occurred in business services, such as advertising, equipment rental, personnel services, and computer programming services. Substantial growth also occurred in health, private educational, and engineering and management services (Figure 4).

Figure 4
One-Year Increase in Service Sector Employment

Retail Sale Continue Rise
March retail sales for the United States rose 2.9 percent above 1997 levels. RAND California estimates that retail sales during the same period in California rose 3.7 percent. The steepest increase occurred in the San Francisco MSA, where retail sales are estimated to have risen 5.1 percent (Figure 5).

Figure 5
California Retail Sales

Housing Prices Show Large Increases
According to the California Association of Realtors, housing prices continued to increase throughout California in March, with the statewide median price reaching $192,600. Overall, California housing prices rose nearly 9 percent over levels a year ago.

Steep prices have been recorded in the San Francisco Bay Area. The median single-family sales price in the combined San Francisco-Santa Clara counties area rose more than 14 percent to $303,000, with the sharpest price increases in the South Bay. Price increases in other California areas were generally less dramatic (Figure 6).

Figure 6
Median Housing Prices, Selected Cities

Foreign Trade Shows Some Weakness
Foreign exports slowed from both Los Angeles and San Francisco customs districts in March. Exports from Los Angeles fell nearly 13 percent, while those from the Bay Area fell nearly 4 percent (Figure 7). At the same time, exports from San Diego, led by strength in trade with Latin America, increased more than 26 percent. Overall, exports from all California customs districts fell about 7 percent. Much of this decrease can be traced to weakness in California's Asian trading partners.

Merchandise imports continued to climb to both San Francisco and San Diego customs districts, but imports fell 9 percent statewide due to a drop in imports to Los Angeles.

Figure 7
Merchandise Exports from California Customs Districts

Inflation Remains Low
Consumer prices rose only slightly in California during the last year, with CPI-U measuring 1.6 percent. Inflation was slightly higher in the Bay Area at 3.1 percent. Inflation registered only 1.2 percent in the Los Angeles Region. As suggested in the discussion about housing prices, the change in CPI for shelter and rent increased more than the overall average (Figure 8).

Figure 8
March 1997-March 1998 Change in CPI-U, Selected Items

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