San Francisco Chronicle: Small job growth a glimmer of hope for California

Job growth a glimmer of hope for state's economy

Andrew S. Ross, Chronicle Columnist

San Francisco Chronicle October 23, 2011 04:00 AM

 

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We're still far from letting the good times roll again, but some numbers out last week suggest there might be more to our economy than the doom and gloom to which we've become accustomed.

First off, California's unemployment rate fell, a tad, from 12.1 to 11.9 percent in September. It's still the second highest in the nation, but at least the rot seems to have stopped.

More important, the state added 11,800 jobs last month. And August's figures were revised upward, from a loss of 8,400 jobs to a gain of 21,100. All told, the state has seen an increase of 250,00o new jobs over 12 months.

"While these results only begin to recover the jobs lost during the recession, California is now outpacing the nation in job growth," said Stephen Levy, director of the Center for Continuing Study of the California Economy, who took a close look at the numbers put out by the state's Employment Development Department. "Fears that everyone is leaving California are contradicted by the data."

Most industries showed gains, most notably the service sector, but also construction, manufacturing and retail. But the wealth wasn't evenly spread. Silicon Valley saw the biggest increase in jobs, thanks to the tech mini-boom, with more moderate growth in the San Francisco area. The city's unemployment rate now stands at 8.3 percent, down from 8.8 percent in August. Alameda and Contra Costa counties' rates dipped slightly, but remain over 10 percent.

Sector wise, the biggest loser was local government, where 8,400 jobs were cut last month. More of that to come.

Lowest unemployment in the state: Marin County, 7.4 percent. Highest: Imperial County, 29.6 percent.

"I think we're past the period of big, recession-induced layoffs in California," said Levy. "But to see more job growth, businesses need to see higher customer demand. It's going to be a longer slog, which makes the debate in Washington over national economic policy so important."

On the comeback trail: But while we're waiting for Washington to get its act together, there were also some encouraging national numbers last week. They included fewer first-time claims for unemployment - though there is still far to go before jobs are in a growth mode - leading economic indicators edging up, and a consumer confidence survey conducted by Bloomberg reaching its highest level in two months.

"Consumers have come back fiercely since the depths of the recession and ... they have shown a renewed willingness to spend," said Christopher Thornberg, principal of Beacon Economics in Los Angeles, who also analyzed the California numbers.

In the meantime, Gov. Jerry Brown last week announced the sale of $1.8 billion worth of tax-free bonds, which he said will "help create tens of thousands of jobs and bolster economic recovery efforts." In particular, Brown pointed to 26 bond-funded Caltrans projects, expected to create an additional 30,000 jobs.

He didn't mention that the state had to offer a higher yield to make the bond sale to nervous investors, costing the state more in interest payments than anticipated.

Neither - as we're noting clouds along with the silver linings - is it clear whether the climate will improve sufficiently to get state revenues where they need to be. At last count, they were $705 million short of projections, with a new round of budget cuts set to trigger in January.

I raised that uncomfortable subject last week with candid and loquacious state Treasurer Bill Lockyer. "If (the trigger) was today, we'd be making cuts," he replied. "But it's not today."

More losses: I also took a look at planned layoffs through the end of the year as recorded by the state's WARN (Worker Adjustment and Retraining Notification) Act database. The database lists planned layoffs, provided 60 days in advance, by employers whose payroll exceeds 100 and who are planning to lay off more than 50 employees.

By my rough count, there are close to 15,000 job cuts - including over 4,000 in the Bay Area and Northern California - scheduled from Oct. 1 until the end of the year. That's a substantial number, although it could be higher as more employers file 60-day notices, or lower if the layoffs have already taken place or employees rehired.

For example, Andronico's, the Bay Area supermarket chain that is in the process of changing ownership, has 426 employees listed as being laid off last Friday. I'm told that in fact they were laid off, but the majority - I wasn't given a number - will likely be rehired when the new owners take charge, which should be in the next several days. The store on Berkeley's University Avenue, however, is said to be closing.

But while there aren't any blockbuster layoffs - like the 1,100 Solyndra employees in Fremont last month - there are some that run into the hundreds. Hewlett-Packard, which announced last month it would be shutting down its webOS and tablet unit, has 408 employees listed to be laid off next month, mostly in Sunnyvale, but also in Cupertino, Rancho Cordova and San Bernardino.

It is, as Levy said, likely to be a long slog, both locally and nationally. But things are beginning to feel more hopeful, aren't they?