Mixed signals sent by California economy
The construction sector has added 45,000 jobs in the past year. (Photo Credit: Daniel Hoherd/Flickr)
It continues to be a mixed bag for the California economy. In fact, sometimes the signals are downright confusing.
The state's unemployment rate for April dropped to 9 percent, the lowest number in a while and down from 9.4 percent in March. But the job growth numbers don't indicate a looming recovery. The state added only about 10,000 jobs. The LA Times, among others, said it may be that just a lot of people have stopped looking for work.
ADP, the payroll company that monitors employment, said that the job growth in California was anemic, reporting that only 2,700 private sector, non-farm jobs were added in the state.
On the other hand, construction jobs showed a healthy increase. Over 7,500 California construction jobs were added in April. And makes 45,000 construction jobs added over the past 12 months.
"The large surge in residential permits so far in 2013, combined with rising home prices will bring a boost to the economy going forward," said Steve Levy, the Center for Continuing Study of the California Economy.
Levy pointed out that the unemployment rates are dropping in some of the hard hit regions of the state, particularly in Southern California. Unemployment is L.A. County is 9.3 percent and 9.6 percent in the Inland Empire counties of Riverside and San Bernardino.
Northern California's rates are much better, below 6 percent in San Francisco, San Mateo, Marin and Napa Counties.
The same sort of mixed signals were coming out of Sacramento this week.
Governor Jerry Brown's May Budget Revision speech reflected the uncertainty and he urged restraint in how the state should spend $4.5 billion revenue increase it has experienced this year. He said the money was a one-time event and shouldn't set off a new wave of spending. He proposed putting much of the money in education, which had been cut in past budgets.
His restraint won him high praise from business leaders who are also a little worried about what some are calling the state's fragile economic turnaround.
"The California Business Roundtable commends the Governor for his prudent and balanced May revision of the proposed state budget," said Robert Lapsley, president of CBRT in a statement reacting to Brown's revision. "We believe it is the right course given the current and projected state of California's economy."
And California Forward, which is working with the California Economic Summit with the goal of creating more middle class jobs in California, also weighed in congratulating the Governor for his restrained tone.
And then on Friday, to add to the intrigue, the Legislative Analyst Office said it thinks that the state may generate $3.2 billion more in tax revenue more than the Governor projected. But even with that, the LAO urged caution in any spending.
So whether things are really turning around or not depends on how you view it.
For one, Levy remains optimistic that things are really turning around, despite the slow growth of the national economy and the uncertainty of the global economy.
"The California economy continues to make steady progress in job growth and reducing the still high rate of unemployment," said Levy. "The wealth of Californians is being rebuilt by increases in home prices and the stock market. And across the state one sees building everywhere. The state continues to make economic gains driven by technology, foreign trade and tourism and now a surge in home prices, sales and new building."