Vol. 1, No. 3
Issued August 3, 1998
Covering the period through May 1998

Next publication date: September 7, 1998

In This Issue

 

San Jose MSA Tops Five-year Employment Growth
Nonfarm employment in the San Jose MSA increased more than 20 percent over the last five years, the largest in any of California's major MSAs (Figure 1). (See RAND California Employment and Unemployment Statistics for detailed employment statistics on California and its regions.) Nonfarm employment growth in the Riverside-San Bernardino MSA was the second highest in the state during this period at 19.6 percent, while the number in the Sacramento MSA grew 15.6 percent. Nonfarm employment grew more than 10 percent in the Orange County, San Diego, Oakland, and San Francisco MSAs. Growth was the lowest in Los Angeles-Long Beach MSA, which expanded 7.5 percent. The average statewide was 12.8 percent.

Figure 1
One-, Three-, and Five-Year Increases in Nonfarm Employment, Major California MSAs

The disparities in nonfarm employment growth have fallen over the last year as the Southern California economy recovers. Nonfarm employment growth from May 1997-May 1998 was the highest in the south, reaching 4.4 percent in the Riverside-San Bernardino MSA and 3.8 percent in the Orange County MSA. Of particular note, however, nonfarm employment growth remained high at 3.6 percent in the San Jose MSA.

 

Unemployment Rate Disparities Continue
The unemployment rate for California fell to a seasonally-adjusted 5.9 percent, a 0.4 percentage point decline from that recorded a year earlier. A number of areas reported unemployment rates below 4 percent, including the Orange County San Francisco, San Jose, Santa Rosa, San Diego, Santa Barbara, and Santa Barbara-Santa Maria-Lompoc MSAs (Figure 2). At the other end of the spectrum, some areas in the Central Valley of California continued to report unemployment rates of more than 10 percent. For example, the unemployment rate in Bakersfield registered 10.9 percent. The unemployment rate in Modesto in May ended at 13.2 percent, and in Imperial County, the unemployment rate was 22.7percent. Perhaps more notable, the unemployment rates recorded in 5 of these 7 areas increased from year-earlier levels.

Figure 2
Unemployment Rates by Major Regions, Counties

Manufacturing Employment Growth Larger than U.S.
Over the last five years, manufacturing employment has expanded in California at a faster rate that in the United States. Between May 1993 and May 1998, manufacturing employment rose 7.4 percent in California, compared with a 4.1 percent rise nationwide (Figure 3). Manufacturing employment increased by more than 24,000—nearly 30 percent—in the Riverside-San Bernardino MSA, and it rose 16.8 percent in the Oakland MSA. The increase in the Riverside-San Bernardino MSA was broad-based. The number of jobs rose in fabricated metal products (3,600 jobs), rubber and miscellaneous plastics (3,600), miscellaneous transportation equipment (3,500), lumber and wood products (3,300), and electronic equipment (3,000). In the Oakland MSA, employment increases were concentrated in electronic equipment (9,300 jobs) and industrial machinery (3,700).

 

Figure 3
Manufacturing Employment

 

Exports Continue to Slide
Merchandise exports continued to fall in May as the impact of the economic slowdown hit California. May 1998 exports from all California customs districts fell 11.8 percent from a year earlier. Exports fell a dramatic 18.7 percent from the Los Angeles Customs District. (See RAND California Merchandise Trade Statistics for more details.) Merchandise exports from the U.S. overall fell just over 4 percent.

Exports from California Customs Districts exhibit a clear downward trend and suggest that the economic situation in Asia has not yet been fully felt (Figure 4). For example, exports from California Customs District were off 2.4 percent in January, about 7 percent in both February and March, 10.5 percent in April, and 11.8 percent in May. The drop has been steeper for the Los Angeles district, falling 3.4 percent in January and, as noted above, to nearly 19 percent in May. Only San Diego, which has seen its exports to Latin American grow substantially, seems relatively immune from the crisis in Asia.

 

Figure 4
Annual Change in Merchandise Exports from California Customs Districts, U.S.

Merchandise imports to California expanded rapidly in May. For the state overall, imports rose 5.0 percent from 1997 levels. Imports to the Los Angeles Customs District grew 7.0 percent, while imports to San Francisco Customs District fell 5.0 percent. Imports to San Diego rose 32.7 percent over 1997 levels. Imports to the U.S. rose 8.0 percent.

Inflation Remains Low
Consumer prices increased 2.0 percent from May 1997-May 1998, just slightly above the U.S. average of 1.7 percent (Figure 5). For the first time in several months, the cost of housing—both rental and owned—registered less than 5 percent and showed signs of slowing. The cost of several items, particularly fuel and utilities, fell substantially.

 

Figure 5
Annual Change in California Consumer Prices

Return to top of this issue
Return to RAND California Economic Reports
Return to RAND California Home Page