Friday, March 20, 2009

Unemployment Friday

The CA EDD reports today that the state's unemployment rate has increased to 10.5%. The biggest news in the report is a 116,000 decline in non-farm payrolls. The story within the sectors is that construction continues to relentlessly lead the decline, down 31,000 (4.3%) in a single month, and down 156,000 (18.5%) in the past year. With the exception of flat employment in normally recession proof health, education, and government sectors; all sectors are declining.

Within Northern California metro areas, the most important development is that San Jose and San Francisco are now seriously in recession after missing it until this fall. Silicon Valley unemployment actually touched 10% this month. Both areas are now down 3% in jobs over the past year, and have almost caught up to the East Bay and Sacramento. Both the technology and banking sectors are leading the decline in these areas.

In the Valley, the employment picture is progressively worse as you go from south to north. This may change over the course of the year as drought impacts are felt in the agriculture sector, but so far the Fresno regions concentrations in farm and government jobs have kept it's job losses at half the pace of the state as a whole. Unemployment in Fresno is very high, but it exceeded its current level as recently as 1999 and through almost the entire decade of the 1990s. Most parts of the state and nation are dealing with unemployment rates not seen in a generation. In fact, farm jobs are positive year over year in Fresno, and continue to be the top performer of the 11 primary employment sectors. As I have posted elsewhere on this blog, you would never know that listening to water exporters or reading the papers about the state's water crisis.

Moving up the Valley, Stockton and Modesto continue to have unemployment in the 15-16% range, and are more impacted by construction and the real estate sector. Still, payroll declines here are still less than CA as a whole (2-3% year to year vs. 4% statewide), as their manufacturing and transportation sectors have not been hit as hard as tech and auto manufacturing in the bay area or the big coastal ports.

Finally, Sacramento continues to be a mess. Payroll jobs are down almost 5% over the past year, led by relentless losses in construction, but also a very battered retail sector. Leisure sectors (particularly recreation, accomodations, and full-service restaurants) are bad and probably reflect a weak ski season at Lake Tahoe. State employment is flat, but the state's budget problems are undoubtedly hurting local retail, restaurants and business service providers as state workers cut spending due to furloughs, and state agencies pull back non-wage spending too.

Not much good news in this report. Our next comprehensive state and metro forecast is running a little behind schedule, and should be out near the end of the month.

No comments:

Post a Comment