Annual job losses are easing in the Sacramento Region

The rate of annual job losses in the six-county Sacramento Region improved somewhat over the fourth quarter of 2009. After a low point of -5.4 percent in October 2009, job growth moved up to -4.8 percent by December 2009. Preliminary data show that establishments in the Region dropped 43,600 payroll jobs in the 12 months ending December 2009. Sacramento’s job growth is still notably lower than the same point in the previous year and tracking well under the statewide and national averages. The recent improvement is in large part due to easing of losses in the large Trade, Transportation, & Utilities and Professional & Business Services sectors along with sustained growth in Educational & Health Services. This behavior was suppressed by slight downturns in two other large sectors, Government and Leisure & Hospitality. Previously published CSER forecasts suggested a bottom in the fourth quarter of 2009, and the observed pattern appears to support this outlook.

The state and nation have both seen job growth climb in the fourth quarter of 2009 with current estimates showing negative growth just over one percentage point less severe than at the end of the third quarter. Between December 2008 and 2009, employment declined by 3.9 percent statewide, equating to a loss of 584,300 jobs. During the same period, the nation posted -3.0 percent job growth with a decrease of nearly 4.1 million jobs.

Regions neighboring Sacramento have also experienced an uptick in job growth over the past few months. The SF Bay Area’s job growth climbed up to around the statewide average of -3.9 percent with a loss of 113,000 jobs in 2009. Stockton and Solano both posted December 2009 job growth above the statewide average, but under the national benchmark. Stockton lost 6,700 jobs in the past year with a corresponding growth rate of -3.3 percent. Job growth in the Solano area came in just above the state at -3.8 percent with a 4,700-job decline. All of these regions are outpacing Sacramento as job growth improves across the larger markets in Northern California.

Major Sector Annual Job Gains and Losses Data Source: CA Employment Development Department

Annual job gains in Sacramento are primarily in health services

In 2009, the Sacramento Region experienced job gains in only one major sector, Educational & Health Services (an increase of 2,500 jobs). Every other major sector shed jobs on an annual basis with Construction experiencing the most severe losses (a drop of 10,900 jobs). A few other major sectors also posted considerable employment declines in Sacramento in the 12 months ending December 2009, including Government; Trade, Transportation, & Utilities; and Professional & Business Services. The net loss of 43,600 in 2009 pulled the Region’s total Nonfarm employment down to 2002 levels. Since the recent peak in June 2007, Sacramento establishments have now shed 89,400 jobs.

Growth in the Educational & Health Services sector is not unique to the Sacramento Region. Statewide (and nationally) this was also the only sector to add jobs between December 2008 and 2009. It was also the only growth sector in the neighboring SF Bay Area. In both California and the SF Bay Area, the Trade, Transportation, & Utilities sector posted the greatest job declines in the past year. Sacramento’s other neighbors, Stockton and Solano, both saw economic conditions in 2009 where not a single major sector added jobs. Construction was the weakest sector in the Stockton area while Trade, Transportation, & Utilities saw the most significant job losses in Solano.