Economist says job creation ‘miserable’ as Orange County market slows

[Source: The Orange County Register] Orange County’s job growth has slowed dramatically as the county has neared what economists consider full employment and the cost of housing continues to rise.

Payrolls grew by 1.1 percent to 1,572,300 from January 2016 to January this year, state employment officials said Friday. Last March the year-over-year job growth rate stood at 3.1 percent.

The current job creation rate is “miserable,” said Chapman University economist Raymond Sfeir, adding that the number of Orange County residents who were employed in January was only 3,100 more than a year earlier, according to the U.S. Census Bureau’s household survey.

In January, the county’s jobless rate, which is not seasonally adjusted, dropped to 3.9 percent, down from 4.1 percent a year earlier.

But the low unemployment figure, which counts only those actively looking for jobs, masked a worrisome trend: Orange County’s labor force shrank slightly over the year, even as its population continued to rise.

“Discouraged workers are not reentering the workforce,” Sfeir said. “Salaries are not high enough to make up for the high cost of living in O.C., so people remain on the sidelines.”

Since the recession, he added, “The bulk of wealth improvement went to upper rather than lower classes, but the rise in the minimum wage to $15 an hour over the next seven years will make a difference.”

Here are year-over-year trends in the county’s largest sectors:

  • Retail trade employment, at 152,500, was essentially flat at 0.1 percent growth. Clothing store jobs dropped by 3.8 percent, reflecting the growth of on-line sales. But grocery store jobs grew by 3.8 percent.
  • Professional and business service jobs grew by 1.2 percent to 295,000. But several high-paying professions did poorly, including architects and engineering jobs which dropped by 4.7 percent.
  • Leisure and hospitality jobs grew by 1.7 percent to 208,200. The highest growth was in the lowest-paid category: fast food restaurant positions expanded by 4.3 percent.
  • Construction jobs grew by only a half percent, to 94,600—a dramatic change from the 14.6 percent growth the sector experienced from January 2015 to January 2016. “Construction is not meeting the demand for housing whether single family or multi-family,” Sfeir said. “That’s why home prices are rising.”
  • Healthcare and social assistance job growth was essentially flat at 0.1 percent: 177,000 positions.
  • Financial positions grew by 1.5 percent to 117,000 jobs.

In December, Orange County’s jobless rate was 3.5 percent, lower than in January thanks to the traditional spike in holiday hiring. Payrolls lost 28,100 jobs in January, including 7,000 in retail and 5,600 in professional and business services.

January employment data was released late, as is customary, because officials spend much of February revising numbers for the previous year based on new information.

February job numbers will be released by the state’s Employment Development Department on March 24.

The employment data includes two surveys: the federal household survey, which asks 5,500 California residents about their job status, and a survey of 58,000 state businesses which asks how many people they have hired.

California’s seasonally adjusted jobless rate fell to 5.1 percent in January, from 5.2 percent in December. Payrolls were up 2 percent over the year.

U.S. unemployment stood at 4.8 percent in January.

“Payrolls have been growing faster in California than the U.S.,” Sfier said, noting that at 0.3 percent, the gap between the state and the nation’s unemployment “is the smallest since the depth of the recession.”

Source: The Orange County Register
March 3, 2017