By Daniel Weintraub
Think California’s economy is bad? It certainly hasn’t returned to full health since the ravages of the Great Recession. But a couple of pieces of economic data released Friday show once again that the state is not the job-killing machine that some try to paint it as.
First, the latest employment reports showed that California employers added 38,300 jobs in June. Coupled with the 45,900 new jobs in May, California was responsible for 50 percent of the job growth in the entire country over those two months.
The strongest job gains were in the information and professional, scientific and technical services sectors, which tend to be high wage positions. But even the long dormant Construction industry added jobs, as did wholesale trade.
The unemployment rate fell to 10.7%, the third highest in the nation, still reflecting the almost total cratering of the construction and finance industries after the collapse of the housing market.
Economist Steve Levy said the numbers show that those who have written off California have misjudged the dynamism of the state’s economy.
“The idea that California is a lagging economy being passed by in comparison to other states can now, hopefully, be put to rest,” Levy said. “Tech, trade, tourism, a strong agricultural sector and the stirrings of a construction recovery give hope for the near and long term future.”
Another hopeful sign came in the latest report on venture capital investing in the second quarter of 2012. Once again, California led the way, by a large margin, and the state did better compared to the rest of the nation than it did in the same period a year ago.
California-based companies were the recipient of 58 percent of the venture capital money invested in the quarter, according to the report from the National Venture Capital Assn. That means more venture capital money was invested here than in the other 49 states combined. Massachusetts was second, with about $800 million.
The $4.1 billion invested in California was slightly more than the $4 billion invested here in the second quarter a year ago, even as the national total declined. Last year, California firms took in about half of the VC money invested in the second quarter.
Most of that money goes to computer software, Internet and life science start-ups, which, when successful, tend to produce high-wage jobs and lucrative stock options for their early employees.
The state is not out of the woods yet. Its budget is still a mess and the state is at risk of ruining a university system that has long been one of its great strengths. But with employment and investment numbers like this, at least California can take solace in the fact that the state has the makings of once again becoming the leading economic engine in the country.