The January report from the state Employment Development Department did not bring good news, especially for Southern California. The report contained revised data for 2006 and 2007, and included some major revisions of history.
Seasonally adjusted nonfarm employment in California declined from December to January by 20,300 jobs. This comes after an 11,400 job increase from November to December. Over the year, nonfarm employment in the state rose by 0.1% or by just 14,900 jobs. Looking at the major employment sectors of the state’s economy (unadjusted data), the largest gains came in government (+49,500 jobs), health services (+36,500 jobs), and professional, scientific & technical services (+34,800 jobs). In the loss column over the year to January were: construction (-60,500 jobs), finance & insurance (-32,000 jobs), and manufacturing (-20,500 jobs).
As noted earlier, January brought dismal employment news to Southern California. Nonfarm employment in Los Angeles County declined by -0.1% or by --4,100 jobs over the year. The biggest loss was in information (-17,800 jobs), followed by manufacturing (-8,700 jobs), finance & insurance (-6,500 jobs), and construction (-5,200 jobs). Adding jobs over the year were health services (+10,000 jobs), leisure & hospitality (+7,200 jobs), government (+5,400 jobs), and professional, scientific & technical services (+4,800 jobs). The revised data revealed that the Writers Guild strike did have an employment impact, with a loss over the year to January of 19,000 jobs in motion picture & video production. The February and possibly the March numbers for this sector should also be impacted by the strike.
In Orange County, nonfarm employment was down by -0.9% in January or
-13,000 jobs over the year. The largest loss was in finance & insurance (-15,700 jobs) followed by manufacturing (-3,400 jobs), and construction (-3,000 jobs). The biggest increases over the year came in retail (+3,300 jobs), government (+2,400 jobs), and health services (+2,100 jobs).
The revised data revealed that the Riverside-San Bernardino area got whacked by the job loss stick. Over the year, employment in the area declined by -0.6% or by -7,300 jobs. The biggest declines came in construction (-8,700 jobs), manufacturing (-5,200 jobs), and retailing (-4,000 jobs). Finance & insurance shed a relatively modest 1,700 jobs. The biggest gains over the year came in government (+6,800 jobs) and health services (+4,400 jobs).
San Diego County was the brightest spot in the January employment report, with an increase of 0.4% or 4,900 jobs over the year, not big gains but we will take them. In the loss column were construction (-6,400 jobs) and finance & insurance (-2,800 jobs), while retailing and real estate each lost -1,600 jobs over the year. Adding jobs were leisure & hospitality services (+3,900 jobs), health services (+3,300 jobs), government (+2,800 jobs) and professional, scientific & technical services (+2,700 jobs).
Nonfarm employment in Ventura County in January declined by -1.1% or by
-3,100 jobs over the year. The largest losses came in manufacturing (-2,100 jobs) and construction (-1,700 jobs). The only meaningful gain came in leisure & hospitality services, which added 1,700 jobs.
In the Bay Area, the Oakland metro area was a tad shaky, with January nonfarm employment up by just 0.1% or 800 jobs. However, the San Francisco metro recorded a solid gain of 2.2% or 20,900 new jobs over the year. The San Jose area recorded a 1.3% or 11,400 job gain in January. (Jack Kyser)
California data: http://www.calmis.cahwnet.gov/file/lfmonth/cal$PDS.pdf
LA County data: http://www.calmis.cahwnet.gov/file/lfmonth/la$PDS.pdf
Orange County data: http://www.calmis.cahwnet.gov/file/lfmonth/oran$PDS.pdf
Riverside-San Bernardino data: http://www.calmis.cahwnet.gov/file/lfmonth/rive$PDS.pdf
Ventura County data: http://www.calmis.cahwnet.gov/file/lfmonth/vent$PDS.pdf
From tracking the “Interim Employment” series, we knew that the annual revisions to the nonfarm employment data for the state and its metro areas were going to be significant. However, the results still were a little startling.
Average annual nonfarm employment in the state rose by +102,900 jobs from 2006 to 2007, instead of the +196,000 initially reported by the Current Employment Survey. Los Angeles County’s average nonfarm employment for 2007 got a relatively modest haircut, with a revised employment increase of +23,300 jobs instead of the preliminary gain of +30,300 jobs.
Orange County posted a revised loss of -5,900 jobs from 2006 to 2007, compared with the preliminary gain of +1,200 jobs. The big pain was felt in the finance & insurance sector, with an annual loss of -9,400 jobs. The temporary help sector also took a hit with a year-to-year loss of -5,200 jobs.
The biggest revision came in the data for the Riverside-San Bernardino area. The preliminary data indicated a gain of +32,700 nonfarm jobs from 2006 to 2007, but the revised data showed an increase of only +1,100 jobs. The problem here was in construction, with a revised loss of -14,700 jobs from 2006 to 2007. The revised data also revealed year-to-year job losses starting in June 2007, as compared with the year-to-year gains previously reported.
San Diego County got a fairly modest downward revision, with a revised increase of +6,600 jobs from 2006 to 2007 compared with the preliminary gain of +8,600 jobs. Again, construction was the weak link, with a revised loss of -5,500 jobs from 2006 to 2007.
Another big revision came in Ventura County, which went from a 2006-2007 preliminary increase of +3,300 jobs to a loss of -1,900 jobs. Year-over-year job losses started in April 2007. The revised data revealed that the big losses from 2006 to 2007 were in construction (-1,900 jobs), and finance & insurance (-1,600 jobs).
In the Bay Area, the Oakland metro area saw its 2007 nonfarm job numbers pared back. It went from a preliminary increase of 12,500 jobs to a gain of just 2,200 jobs. Revisions were more modest for San Francisco and San Jose. For the latter, the preliminary 2006-2007 gain of 21,000 jobs was revised up to an increase of 22,400 jobs. For San Jose, the preliminary gain of +18,500 jobs was cut back a little to a gain of +16,900 jobs. (Jack Kyser)
The California Employment Development Department (EDD) released January unemployment estimates last week. Seasonally adjusted, the Los Angeles County unemployment rate was 5.7%, up from 5.4% in December, from 5.3% in November, and from 4.7% a year earlier. January was the eighth consecutive month that the County’s unemployment rate increased over the previous year. Last month’s County unemployment rate was the highest since February 2005 (5.7%).
California’s seasonally adjusted jobless rate remained steady in January at 5.9%, which was still up from November’s rate of 5.7%, and up from 5.0% a year earlier. By way of comparison, the seasonally adjusted U.S. unemployment rate for January was 4.9%, down from 5% in December, yet up from 4.7% in November, and up from 4.6% a year earlier.
The combined five-county area unemployment rate rose by +1.0 percentage point from January 2007 (to 5.8%). The jobless rate increased by +1.4 percentage points in Riverside County (to 7.0%), by +1.0 percentage point in San Bernardino County (to 6.3%), by +1.0 percentage point in Ventura County (to 5.9%), and by +0.7 percentage points in Orange County (to 4.4%). The unemployment rate (not seasonally adjusted) in Los Angeles County increased by +1.0 percentage point over the last 12 months to 6.0%.
San Diego’s unemployment rate rose to 5.1% in January, up by +0.7 percentage points from a year earlier.
The Bay Area's combined unemployment rate (not seasonally adjusted) increased by +0.5 percentage points to 5.1% in January. Over the last 12 months, joblessness increased by +0.6 percentage points in the Oakland-Fremont-Hayward Metropolitan Division (to 5.3%), by +0.5 percentage points in the San Jose-Sunnyvale-Santa Clara Metropolitan Statistical Area (to 5.3%), and by just +0.2 percentage points in the San Francisco-San Mateo-Redwood City Metropolitan Division (to 4.3%). (April Lisonbee)
Seasonally adjusted
| Area | Jan-08 | Dec-07 | Nov-07 | Jan-07 | M/M Chg | Y/Y Chg |
| United States | 4.9% | 5.0% | 4.7% | 4.6% | -0.1 | 0.3 |
| California | 5.9% | 5.9% | 5.7% | 5.0% | 0.0 | 0.9 |
| Los Angeles Co. | 5.7% | 5.4% | 5.3% | 4.7% | 0.3 | 1.0 |
Not seasonally adjusted
| Area | Jan-08 | Dec-07 | Nov-07 | Jan-07 | M/M Chg | Y/Y Chg |
| United States | 5.4% | 4.8% | 4.5% | 5.0% | 0.6 | 0.4 |
| California | 6.3% | 5.9% | 5.6% | 5.5% | 0.4 | 0.8 |
| Los Angeles Co. | 6.0% | 5.2% | 5.1% | 5.0% | 0.8 | 1.0 |
| Orange Co. | 4.4% | 4.3% | 4.2% | 3.7% | 0.1 | 0.7 |
| Riverside Co. | 7.0% | 6.9% | 6.6% | 5.6% | 0.1 | 1.4 |
| San Bernardino Co. | 6.3% | 6.2% | 6.0% | 5.3% | 0.1 | 1.0 |
| Ventura Co. | 5.9% | 5.7% | 5.5% | 4.9% | 0.2 | 1.0 |
| San Diego Co. | 5.1% | 5.0% | 4.9% | 4.4% | 0.1 | 0.7 |
| Oakland MD | 5.3% | 5.0% | 4.9% | 4.7% | 0.3 | 0.6 |
| San Francisco MD | 4.3% | 4.1% | 4.0% | 4.1% | 0.2 | 0.2 |
| San Jose MSA | 5.3% | 5.1% | 4.9% | 4.8% | 0.2 | 0.5 |
PR: http://www.edd.ca.gov/urate200710.pdf
Data: http://www.calmis.cahwnet.gov/file/lfmonth/CalPR.pdf
The January report from the California Association of Realtors (CAR) contained another dose of bad news. Unit sales in the state were down by 29.8% over the year, while the median price declined by 21.9% to $430,370. The CAR’s Unsold Inventory Index (the number of months needed to deplete the supply of homes on the market at the current sales rate) was 16.8 months, compared with 7.6 months last year.
The news around Southern California was no better. In January, unit sales in Los Angeles County declined by 38.1%, while the median price dropped by 18.4% to $469,420. In Orange County, unit sales declined by 38.3% over the year to January, while the median price moved down by 11.6% to $609,030. In the Riverside-San Bernardino area, January unit sales slipped by 18.5%, while the median price moved down by 25.4% to $298,010 (that’s getting back down to affordable territory). In San Diego County, unit sales dropped by 20.4%, while the median price declined by 17.1% to $482,420. Ventura County saw January unit sales slide down by 38.3%, while its median price dropped by 11.1% to $590,380.
“San Francisco Bay” saw unit sales move down by 39.3% over the year to January, while the median price declined by 3.9% to $691,390 (this was the second year-to-year decline in a row). San Jose recorded a 42.9% drop in unit sales, but the median price managed to eke out a 1.4% increase to $750,000. (Jack Kyser)
PR: http://www.car.org/index.php?id=MzgyOTU=
The number of housing permits issued in the state during January 2008 was down by 53.2% over the year to just 4,700 units. However, the Construction Industry Research Board noted that revised statewide building codes went into effect in January so many permits were pulled prior to the code change. The single-family sector took the biggest hit, with a 62.0% decline over the year to January.
Los Angeles County had 738 permits issued, down by 48.5% over the year. Single-family permits plummeted by 61.7%. In Orange County, the January permit count was only 118 units (on my), down by 75.1% over the year. Multi-family units took the biggest hit, falling by 75.1%. The Riverside-San Bernardino area saw 725 permits issued in January, down by 71.0% over the year, with both the single family and multi-family sectors taking big hits.
San Diego County saw the January housing permit count drop by 61.0% to 320 units. The multi-family sector declined by 72.9%. And wonder of wonders, Ventura County saw a 3.6% increase in permits issued over the year to 58 units.
The 9-county Bay Area also saw an increase in permits over the year, rising by 8.3% to 1,257 units. All the strength was in the multi-family sector, which rose by 127.1% thanks to a burst of permits in San Francisco County. (Jack Kyser)
The January nonresidential permit valuation data from the Construction Industry Research Board was also soft. In Los Angeles County, industrial and office were down by 6.5% and 65.2% respectively, while retail rose by 166.9% over the year. In Orange County, office and retail values were down, by 92.8% and 75.9%, respectively. However, industrial permit values surged by 372.8% over the year to January.
Things were also weak in Riverside County in January, with industrial values down by 68.7% while retail slipped by 35.4%. No office permits were issued during the month. In San Bernardino County, retail permit values rose by 28.7% over the year to January. However, industrial and office both slipped, by 94.2% and 57.3%, respectively.
No industrial permits were issued in San Diego County during January, while office and retail both declined, by 67.3% and 53.0%, respectively. Ventura County also got a pass in January on industrial permits, and saw a 58.4% decline in office permits. However, the retail sector rose by 12.2%.
In the 9-county Bay Area, office and retail permit values both declined over the year to January, by 91.7% and 21.3% respectively. However, there was a surge in the industrial sector, thanks to a $75.0 million R & D facility in Solano County (which was classified as industrial). (Jack Kyser)
The U.S. Bureau of Economic Analysis (BEA) reported last week that U.S. personal income rose by +0.3% in January, following increases of +0.5% in December and +0.3% in November. Rising wages and salaries were the primary contributor to last month’s lower growth in total income, despite a decline in nonfarm employment. After income taxes, disposable personal income did a bit better, increasing by +0.4% in January compared to growth of +0.4% in December and +0.3% in November.
Consumer inflation continued uncomfortably high in January. The BEA’s price index for personal consumption expenditures (called the PCE deflator) rose by +0.4% last month, following increases of +0.3% in December and +0.6% in November. Rising food and energy prices were the primary culprits. Compared to January 2007, the PCE deflator has increased by 3.7% while the core PCE deflator (which excludes food and energy prices) was up by just 2.2%.
With more income going to pay for energy and groceries, consumer spending was flat again in January. Real personal consumption expenditures (after adjusted for inflation) showed no change last month. This was a repeat of December’s performance. January’s lackluster results reflected lower spending for consumer durable and nondurable goods--down by -1.3% and -0.2% over the month respectively—especially motor vehicles and furniture. These declines were offset by higher spending for services (+0.4%).
The weakness in consumer spending during the December-January period provides very little support for the U.S. economy. Overall economic growth will continue to be slow in the 1st quarter if consumers don’t open up their wallets more in February-March. (Nancy D. Sidhu)
PR: http://bea.gov/newsreleases/national/pi/2008/pdf/pi0108.pdf
Wholesale prices as measured by the Producer Price Index (PPI) for total finished goods rose again in January, up by 1.0% from December 2007 and up by 7.4% from January 2007. The consumer food price index surged for the second straight month, up by 1.7% from December to January and was up by 8.3% from the same period the previous year. FYI: Within the food group, pasta products increased the most, up by a whopping 16.2% for the month and by 30.4% over the year. Egg prices continued to go up, rising by 6.9% in January and by 60.1% year-over-year. Though prices of dairy products declined by a mere -0.6% between December and January, they were still way up from a year ago, up by 21.4%.
Wholesale energy prices advanced in January, rising by 1.5% after a decline of 3.0% in December. Year-over-year wholesale energy prices were up by 22.6%. Wholesale gasoline prices increased by 2.9% over the month and were up by 48.1% from a year ago. Home heating oil prices rose by 8.5% from December and were up by 48.1% from January 2007. On the other hand, residential electric power prices were down by -1.2% for the month, but were still up by 4.2% year-over year. Excluding food and energy, the core finished goods index was up by 0.4% in January and was up by 2.3% from the same period a year ago.
Wholesale prices for intermediate goods also increased, up by 1.4% in January from December 2007. Intermediate food prices rose by 3.3% over the month. Farmers’ costs increased once again with prices of fertilizers, energy, and feeds all higher during the month and over the year. Intermediate energy prices increased by 2.8% in January following a decline of -1.6% in December. Within energy, jet fuels increased the most, up by 9.3% during January and by 54.9% over the year. Excluding food and energy prices, the core index for intermediate goods rose by just 0.8% over the month. The core intermediate goods index has risen by 4.1% over the past 12 months. Compared to a year ago, the overall intermediate goods index was up by 8.8%.
Wholesale prices for crude goods rose by 2.5% in January, following a 1.1% increase the previous month. Crude food prices rose by 2.7% in January. Energy prices rose over the month as well, up by 1.8% following a 0.7% decline in December. Excluding food and energy prices, the core index for crude goods was up by 4.0% between December and January. Compared to a year ago, the overall crude goods index was up by 31.3%. (Candice Flor Hynek)
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