California leading employment indicator shows growth to come
This economic recovery has been, at best, sporadic. As stimulus spending slows and census jobs end, many fear that the employment picture will get worse, rather than better.
But an employment indicator released Wednesday by Chapman University's A. Gary Anderson Center for Economic Research shows that employment in California will continue to tick up this year. It indicates that year-over-year job growth will turn positive in the fourth quarter this year, something that hasn't happened consistently in the state since 2007.
"We're going to create enough jobs to be above what we were the year before," said Esmael Adibi, director of the Anderson Center. "But the growth rate is going to be very anemic."
The state has gained 71,000 jobs this year, but it lost 1.3 million in the economic slowdown.
When the leading economic indicator is below 100, the state will experience year-over-year job losses. The level increased to 99.8 in the third quarter, up from 95.2 in the second quarter.
"The pickup in the indicator series suggests that job creation should continue in the third quarter," a news release said.
Economists calculate the indicator using data such as exports, gross domestic product, the Standard & Poor's 500 index and construction spending in the state. All components except for construction spending increased in the second quarter: Exports were up an annualized level of 14.4% and the S&P 500 was up 12.1% from the year before.
Construction spending, however, is still weak -- down 36.6% in the second quarter from the same period last year. The state has lost 405,000 construction jobs from peak employment in the sector in February 2006, a 43% decline.
"Construction is a big drag," Adibi said.
-- Alana Semuels
Photo: Construction employment is one of the slow spots in a recovery. Credit: Greg Younger via Flickr