Southern California Employers Pull Back on Hiring in April
Most major U.S. metros saw hiring slow in April 2017, but the trend was particularly pronounced in Southern California. Recent Bureau of Labor Statistics data show job growth levels dropped – sometimes drastically – in each of the Southern California major metros in the past year. That’s a surprising development for the region, which had been enjoying strong economic growth following a slow start to the recovery after the recession. That recent growth streak took unemployment rates to the lowest levels in more than 10 years in Los Angeles, Orange County, San Diego and Riverside/San Bernardino.
Annual job gains topped 100,000 in Los Angeles throughout much of 2015 and 2016. In the year-ending April 2017, however, the metro added just 44,600 jobs, growing the workforce 1.0%. That’s about one-third the rate of the previous two years.
Driving down growth recently has been large cuts to the Information sector, particularly in the Motion Picture and Sound Recording Industries subsector. That Hollywood-focused segment lost 13,100 jobs in the past year, a drastic shift from the sizable gains of 2016. Meanwhile, Manufacturing continues to shed jobs, and recent growth in the Leisure/Hospitality Services industry is less than half of the 2015 and 2016 levels.
One bright spot in Los Angeles’ recent performance was continued growth in health care-related fields. The industry made up the bulk of 25,900 new jobs in the Education/Health Services sector, by far the best sector-level performance in the year-ending April 2017.
Orange County added 7,300 jobs in the year-ending April 2017, growing the employment base 0.5%. In contrast, the metro added roughly 40,000 to 50,000 jobs annually over most of the past two years, resulting in growth rates of around 3% to 3.5%.
The slowdown in the past year was widespread among employment sectors. Hiring has slowed significantly in the Professional/Business Services and Leisure/Hospitality Services categories, major contributors to the growth streak throughout 2015 and 2016.
Another driver during those years, the Education/Health Services sector, was among a handful of industries to log annual job loss in the year-ending April 2017. Shrinking by 700 positions, on net, for the 12-month period, it was the first time since 1998 the sector registered annual negative change. A Bureau of Labor Statistics breakdown of the sector reveals education-related fields actually grew. The subsector of Health Care/Social Assistance lost about 2,000 positions in the year-ending April 2017. Likewise, job losses in Retail Trade (-2,900 jobs) outweighed gains in other subsectors that make up the Trade/Transportation/Utilities segment. Meanwhile, Manufacturing also shed about 2,200 jobs.
In San Diego, employers added 18,200 jobs in the year-ending April 2017 – the lowest annual count since March 2012. That’s in contrast to the metro’s growth of 35,000 to 45,000 jobs throughout much of the past two years – growth that had helped San Diego land among the nation’s five most stable apartment markets.
The Government and Construction sectors maintained solid momentum in the year-ending April. However, most other sectors softened. Slowing was particularly pronounced in two subsectors of the Professional/Business Services and Leisure/Hospitality Services industries. The Professional/Business Services subsector of Administrative and Support Services lost 1,500 jobs in the past year. Meanwhile, Accommodation and Food Services in the Leisure/Hospitality Services category shed about 1,600 jobs.
The story in Riverside/San Bernardino isn’t as drastic as in neighboring metros, and is likely the result of some normalization. Though momentum slid in the year-ending April 2017, the degree was relatively minimal. For the 12-month period, the metro’s employment base grew 3.1%, or 43,300 jobs. That’s down from growth rates of around 5.0% that spanned 2015, when the metro ranked as a national leader for creation. However, 3.1% easily topped the national average in April.
Most employment sectors saw hiring slow in the year-ending April. Softening was most pronounced in the Trade/Transportation/Utilities and Education/Health Services sectors. However, a surge in construction jobs compensated for some of the slowdown in other sectors. The Construction industry added 14,600 jobs, the largest annual growth in that sector since 2006.