California gained jobs in May — a very positive development in light of the job loss first reported for April. In May, the state added 33,900 jobs and April’s initially reported loss of 4,200 jobs was revised up to a gain of 1,300 jobs—a 5,500-job swing. The state is still in the midst of a slow, steady recovery with modest employment growth. The state continued to add jobs in its high-paying specialties.
Labor Market Conditions
Industry job gains in May were led by the leisure and hospitality sector, which added 13,200 jobs. This includes the accommodation and food service subsector, which, based on resurgent tourism and business travel, has essentially recovered all of the jobs lost during the recession.
In May, professional and business services posted strong job gains—adding 10,500 jobs and rising 4.1 percent over the year. The high-wage professional, scientific & technical services subsector again led this growth, and in April was the first private industry subsector to regain all of the jobs lost during the recession.
Even though financial activities has been recovering slowly—rising 1,100 in May—job growth in its real estate rental and leasing subsector has been accelerating, reflecting recent improvements in real estate activity driven by investor activity and rising demand and supply of rental properties.
Other job gains in May included education and health services (10,500), manufacturing (3,000), construction (2,600), information (1,000), and mining and logging (200). Only three industry sectors lost jobs in May. Government dropped 3,300 jobs, as did trade, transportation and utilities. Other Services lost 1,600 jobs.
California’s private sector is leading the recovery in employment. Private employment during the first five months of 2012 was up 1.9 percent over the same months of 2011, while government employment dropped 1.8 percent.
The state’s unemployment rate dropped to 10.8 percent in May, with employment growth outpacing labor force growth. The number of employed Californians rose 25,000—the eleventh consecutive increase—and the number of unemployed fell 12,500.
Real estate markets may have begun a turnaround. In May, California home prices posted their third consecutive year-over-year gain and the statewide median price rose above $300,000 for the first time since October 2010. The pace of existing home sales in May was the strongest since February 2009.
Sales of existing, single-family detached homes totaled 572,260 units at a seasonally adjusted annualized rate in May, a 21.5 percent increase from a year earlier. The median price of existing, single-family homes sold in May was $312,110, up 6.6 percent from a year earlier.
Inventory measures also improved dramatically in May. The unsold inventory index fell to 3.5 months, the lowest inventory reading since December 2005. The median number of days needed to sell a home also fell to 46.6 days, a 10.4 percent improvement from a year earlier.