California Employment Grows for Third Consecutive Month -- June 25, 2004 -- California Capitol Hill Bulletin -- Volume 11, Bulletin 21

The State Employment Development Department (EDD) reported this month in their Labor Market Review that despite job losses in government, information, and manufacturing non-farm sectors saw a net gain of 23,600 jobs in May -- 9.5% of 248,000 jobs added throughout the country. The increase marks a third straight month of growth. There were 14,501,200 jobs in total non-farm industries in May, up 23,600 jobs from last month, following a 15,700-job gain in April and a 21,500-job gain in March. Compared with May 2003, non-farm employment in the state grew by 110,200 jobs, a 0.8% rise. This places the California job growth rate nearly on par with that of the nation.

EDD reports that almost all fields experienced growth in May with the exception of the natural resources and government sectors, which experienced decreases of 0.9% and 0.4% respectively for the month. Information industry jobs grew by 7,400 jobs, the largest gain in May, and construction rose by 3,100 jobs, continuing to maintain the highest year-over growth rate. Manufacturing added 400 jobs but the industry is still down 21,800 jobs for the year, a decrease of 1.4%, according to the report while trade, transportation, and utilities grew by 4,550 jobs and in financial activities 1,700 new jobs were created. Professional and business services increased by 6,600, educational and health services by 3,300, leisure and hospitality by 3,800 and other services by 2,800.

Another report published by Chapman University's A. Gary Anderson Center for Economic Research predicts job creation will continue to accelerate into next year. The report based on national, state and county data estimates an increased growth rate from 0.4% in the state's first quarter this year to a peak of 1.8% in the second quarter next year. Further, the study asserted that the state will add 172,000 payroll jobs in 2004, a 1.2% increase, and 238,000 in the next year, a growth of 1.6%, according to the report.

In a press report, Howard Roth, chief economist for the state's Department of Finance urged caution when looking at the positive employment trends. Staffing agencies accounted for more than 6,000 new jobs in May, meaning that many new jobs are temporary and not indicative of long-term growth. Mr. Roth said that although temporary hiring was predicted to be a positive sign for future employment, a shift away from that trend to one of long-term hiring is taking a long time.

The EDD's review is available at: http://www.calmis.ca.gov/file/lfmonth/CaLMR.pdf , and Chapman's publication may be ordered at: http://www.chapman.edu/argyros/asbecenters/acer/default.asp .

To expand communications between Washington and California, the California Institute provides periodic bulletins regarding current activity on Capitol Hill that directly impacts our state. Bulletins are published weekly during sessions of Congress, and occasionally during other periods.

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