Jobs

Chris Kirkham
January 22, 2016

California employers added 60,400 jobs in December, according to state data, one of the largest single-month gains in the last three years.

That strong job growth lines up with the robust numbers released this month for the U.S. overall. Over the last year, California has added jobs at a rate of 2.9%, faster than the 1.9% growth rate nationwide.

The state unemployment rate, based on a separate survey of households, increased slightly to 5.8% in December from 5.7% in November. The nationwide unemployment rate is at 5%.

Whether that pace of job growth will continue amid tumultuous global markets and an economic slowdown in China is the big question. Market gyrations don’t necessarily correlate with trends in the broader economy, but experts are watching closely to see how long the turmoil lasts.

“We’re in the yellow zone right now — not a red light, not a green light,” said Lynn Reaser, an economist at Point Loma Nazarene University in San Diego. “We don’t know exactly how long or how damaging this sell-off could be.”

Because of its location on the Pacific Rim, California is slightly more exposed to the slowdown in China than the rest of the nation. The agriculture industry in particular has already seen the effects as exports of dairy and nut products have declined.

But California exports to China still represent only about 1.1% of the state’s $2.3-trillion economy. Much like the U.S. overall, the bigger risk to California’s economy could come from prolonged volatility in global financial markets, which could dampen business investment and consumer confidence.

Venture capital activity slowed down in California at the end of last year, with funding declining from $12.1 billion in the third quarter to $6.8 billion in the fourth quarter, a 44% decline, according to research firm CB Insights.

Non-residential investment (equipment, buildings, software) in the U.S. for the third quarter last year was up only 2.3% from the prior year. For the same period in 2014, investment grew 7.2% from a year earlier.

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