California’s unemployment rate dropped a tick in June to 12.3 percent from 12.4 percent the month before, even as the state lost 27,000 jobs, most of them laid-off temporary census workers. The private sector added about 1,300 jobs, according to the Employment Development Department.
You can read the full report here.
And here is an analysis by our friend Steve Levy, director of the Center for the Continuing Study of the California Economy:
The large battleship we call the California economy is, like the nation’s economy, taking a long time to turn around. June was another month where private sector job levels remained stuck in neutral and disappointing.
Private sector job growth in June was very small in California as in the nation as consumers and businesses spend cautiously and most businesses are not ready to expand hiring so soon after laying off so many workers.
The job scene in California is especially difficult because the construction sector has lost 400,000 jobs during the past three years and there have been additional construction related job losses in retail trade, finance and manufacturing. It will be at least another year before construction activity will pick up as there are plenty of homes and commercial space available on the market today. Construction losses are the main reason unemployment rates are so much higher in California compared to the national average.
The good news continues to be outside the jobs reports. Foreign trade and port activity is growing. Hotel and tourism activity is slowing expanding. And venture capital funding grew by 34% nationwide in the second quarter of 2010 with California funding leading the way.
The slow pace of job recovery is understandable given that consumers and businesses have good reasons to spend cautiously. Many consumers face large debt burdens accumulated in recent years as well as declines in the value of their homes and retirement portfolios. Even consumers with secure jobs have reasons to spend cautiously.
And while business spending on efficiencies has picked up and new ventures in technology are on the upswing, there is no compelling reason, even with strong profits and low interests rates, to add capacity in most industries in the absence of stronger consumer demand.