California saw a net gain of 9,700 jobs in January while its unemployment rate fell to 5.1%. (Source: Employment Development Department and Los Angeles Times graphics)

Natalie Kitroeff
March 3, 2016

The California economy started 2017 on a strong note, with employers adding a net 9,700 jobs in January and the unemployment rate dropping to 5.1%, according to data released by the Employment Development Department.

January was a banner month for the country — which gained a net 227,000 new jobs. But California continued its years-long trend of outpacing the national economy in job growth, piling on jobs at a year-over-year rate of 2%, faster than the national rate of 1.6%.

The unemployment rate in the state has improved markedly since January 2016, when it was 5.7%. But California’s jobless rate of 5.1% still puts it above the national rate of 4.8%.

The state’s education, health, and professional and business services sectors were the most energetic in the first month of the year, padding their payrolls by a combined 32,300 jobs.

January was less kind to workers in trade, transportation and utilities, traditionally among the state’s strongest industries. Employers in that sector cut their labor forces by 21,100.

The state has been adding fewer jobs in the last two months than it did earlier in 2016, a trend that economists say may be here to stay were fewer people without a job and looking for work.

“Overall job growth has been losing momentum. With the labor market tightening, it’s becoming tougher to find workers,” said Mark Vitner, a senior economist at Wells Fargo.

Vitner said it was possible that companies were reacting to the increase in the state’s minimum wage, from $10 to $10.50, in January.

“The hikes of the minimum wage we saw in the state combined with a lackluster holiday shopping season may have caused folks to cut back on employment,” he said. If the retail numbers don’t bounce back in February, he said, “maybe there’s something there.”

Los Angeles County lost 78,700 jobs in January, a large chunk of them in retail and wholesale trade, as well as transportation, warehousing and utilities.

Hospitality businesses in the county, which include restaurants, also took a hit, cutting 19,000 jobs.

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