Vol. 1, No. 5
Issued Oct. 6, 1998
Covering the period through July 1998

Next publication date: November 23, 1998 (New production schedule)

In This Issue

• Job Growth Slows in California
• Unemployment Rate Hits 5.7 Percent
• Manufacturing Slowdown Pronounced in July
• Exports Continue to Fall

Job Growth Slows in California
Nonfarm job growth in California recently slowed significantly, according to figures released by the Employment Development Department. For the year ending in July, statewide nonfarm job growth (seasonally adjusted) was just under 400,000. Although this remains high by recent historical standards, it is roughly 20 percent lower than than in most preceeding months. Figure 1 illustrates a twelve-month moving average of nonfarm job gains from July 1997 to July 1998.

Figure 1
California Nonfarm Employment Gains, Twelve-month Moving Average

The most significant slowdown in nonfarm employment growth on a twelve-month moving average occurred in the San Francisco Bay Region, where the number of new jobs for the year ending in July 1998 fell to 70,000 from 140,000 a year earlier (Figure 2). Despite this decline, the number of nonfarm jobs in the Bay Area still increased 2.1 percent, compared with a 2.8 percent rate statewide. The rate of change in the Los Angeles Region remained steady at about 200,000. The number fell in Bakersfield MSA, turning slightly negative in July 1998.

Figure 2
Regional Nonfarm Employment Gains, Twelve-month Moving Average

Manufacturing Slowdown Pronounced in July
A large share of the job slowdown has occurred in manufacturing, which until recently was expanding at an annual rate of about 50,000. July 1998 figures indicate that the number of net new manufacturing jobs for the year ending in July rose by only 5,000 (Figure 3). Overall, the number of manufacturing jobs statewide in July 1998 reached 1.93 million, an increase of 6,000 from July 1997. This follows an increase of 70,000 manufacturing jobs from July 1996-July 1997.

Figure 3
CaliforniaMajor Sector Employment Gains, Twelve-month Moving Average

Unemployment Rate Hits 5.7 Percent
Despite this slowdown, the unemployment rate in California remains at its lowest point since 1990, measuring 5.7 percent in July (Figure 4). (See RAND California Employment and Unemployment Statistics for detailed employment statistics on California, MSAs, and its regions.)

Figure 4
California Unemployment Rate 1990-July 1998

Exports Continue to Fall
Merchandise exports from the San Francisco and Los Angeles Customs Districts continued to fall in July (Figure 5). Compared with 1997, July exports were off 18.0 percent from San Francisco, 22.2 percent from Los Angeles, and 18.3 percent for the state as a whole. Exports from San Diego Customs District in July were 8.9 percent higher than in the previous year. U.S. exports were off 6.2 percent. (See RAND California Foreign Trade Statistics for more details.)

Figure 5
Customs District Exports, Twelve-month Moving Average

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