Today’s CA Employment Numbers – Local Regions Reveal Jobs Picture.
Two credit union industry economists from Southern California and Northern California Dwight Johnston and Robert Eyler made the following comments this morning as the California Employment Development Department’s (EDD) nonfarm payroll jobs report was slated to be released for county and statewide levels:
Robert Eyler, Board Member of Redwood Credit Union and Economist at Sonoma State University
“Right now California remains the national barometer for the labor market, as forecasts for job growth in the United States are predicated upon forecasts for California. The technology sector in the Bay Area is a microcosm of that focus. For instance, when the Bay Area slips in an unpredictable way—which has not happened yet—you will see reverberations elsewhere. Currently there are no real “cool” spots on the job growth front in the state, only areas reaching full employment and naturally slowing.”
“With spring here and summer on its way, California’s main labor market issues are harvest and tourism. Summer, especially late summer, will have a lot of the agricultural harvests and will test the tight labor market as workers move up and down California to satiate labor demand. This was an issue in California last year. Between political concerns and continued hiring, there may be more imported labor coming—perhaps from other states if California’s southern border tightens more.”
“There’s a connection between California’s employment scene, ongoing trade tariff discussions, and recent political policies. Watch the potential flow of immigrant workers within agriculture from wine grapes to almonds to cannabis—it may be slower, thus helping wages and prices rise. Also, sea port activity may be slower than expected if the trade tariff chatter turns into reality, which would affect jobs in Los Angles, Oakland, and Stockton. Additionally, the recent congressional tax reform law might create a slight increase in labor supply this spring and summer due to people re-entering the labor market and having a marginal reason to do so as some businesses turn tax incentives into investment and jobs, which may provide short-term relief.”
“Every region in California has a story to tell. Slower growth is coming to the Bay Area due to housing prices and tight labor markets. But there may be more growth in San Jose, Solano County, and Sonoma County as medium-size technology firms look for new headquarters. Los Angeles and San Diego’s labor markets are moving well, following the Bay Area’s lead. Sacramento has been growing steadily but its suburbs are starting to really expand. And places like Stockton are seeing movement since the region is tied to the Bay Area and Sacramento. Fresno is going through a similar movement, where logistics and agriculture have come back. Slower spots are places like Napa, mainly because it is running out of room to grow quickly, and places north of San Francisco where home prices have been rising quickly.”
Dwight Johnston, Chief Economist for the California Credit Union League
“California has continued to exceed the national averages for growth in both jobs and wages, and this will most likely continue. But state job growth may soon slow down to the national average’s pace as the local labor pool in employment sectors growing most strongly has been depleted. However, this tightening labor pool would lead to even more significant growth in wages. California’s average yearly growth in worker wages is 3.7 percent versus the U.S. average of 2.7 percent, and many Bay Area counties as well as some in Southern California are registering wage gains of 5 percent or greater.”
“The only major worry about the future jobs picture in California is what could happen if a real trade war breaks out between the United States and other countries, especially China. There has been much smoke and mirrors around the trade issue, but we have not yet seen any final changes take place. If the tit-for-tat tariffs being threatened by either side get enforced, the California economy will be noticeably hit.”
“California’s technology, trade and transportation, ports and logistics, and agricultural industries would feel the brunt of any trade war. But if a potential trade war goes further and also sinks the stock market and the U.S. economy in general, all job sectors in California stand to get hit. Fortunately there are some hopeful signs of more cooperation and less rancor, but the situation remains unsettled.”
California Credit Union League
The California Credit Union League is based in Ontario, CA and is the state trade association for 313 credit unions headquartered in California (as of fourth-quarter 2017). The League represents the interests of 11.6 million credit union members across the state who are member-owners of their credit unions. Credit unions help consumers afford life and prosper.