Center for Strategic Economic Research
Economy Watch and the Quarterly Economic Report are ongoing publications examining various economic growth indicators and other factors in the Sacramento Region. These publications presents a snapshot of current economic conditions in the Sacramento Region and provide comparisons with other selected regions of California and the United States.
September 2014

SACRAMENTO’S ANNUAL JOB GROWTH SLOWED TO THE STATEWIDE AVERAGE

Between August 2013 and August 2014, preliminary data shows that the number of jobs on payrolls in the six-county Sacramento Region grew by 1.9 percent, similar to the statewide average and just above the national average. Although this reflects a gain of about 17,000 jobs from the previous year, this annual rate of growth is much slower than what the Region posted in the previous month and in August 2013. All of the Regionís five largest sectors experienced a dip in annual job growth since last month, but four of these sectors still posted positive annual job growth in August 2014. Only one sector, Professional & Business Services, posted a rate greater than the previous year. The disparity in performance among these sectors still exists with the Professional & Business Services and Educational & Health Services sectors posting rather strong annual job growth at 6.1 percent and 4.7 percent, respectively. The administrative and support services and health care segments contributed significantly to these two sectorsí annual job gains. Job gains in the Regionís largest sector, Government, were driven by growth in the state government portion while local and federal government experienced losses slowing this sectorís annual job growth to 0.6 percent in August 2014. Trade, Transportation, & Utilitiesí 0.5 percent annual job growth was primarily attributed to gains in the retail component. After a brief period of positive annual job growth, the Leisure & Hospitality sector dipped back into negative territory posting a rate of -0.7 percent in August 2014. The component that includes restaurants and bars still showed job gains, but at a much lower level than the previous month and not enough of a gain to make up for losses in the accommodation and recreational segments.

Annual Job Growth

MOST OF THE REGION’S LARGEST SECTORS EXPERIENCED ANNUAL JOB GAINS

California saw 1.9 percent annual job growth in August 2014 with the number of jobs on payrolls increasing by nearly 293,000. This growth rate, which was 1.5 percentage points below the same point in the previous year, continues Californiaís overall downward growth trend. Annual job growth at the national level was flat at 1.8 percent with a gain of 2.5 million jobs. With 2.9 percent annual job growth in August 2014, the SF Bay Area saw a very slight uptick since the previous month and is still one of the strongest regions in the state, but its rate is 1.3 percentage points lower than one year prior. It is important to note that some slowing is expected as an economy moves through an expansion phase. The Stockton market added 2,500 jobs and dropped to 1.2 percent annual job growth while Solanoís annual job growth increased to 1.6 percent, adding 2,000 jobs.


Sacramento Region Largest Sector Annual Job Growth


SIX OF SACRAMENTO’S MAJOR SECTORS ADDED JOBS IN THE PAST YEAR

Six of the Sacramento Regionís 11 major sectors added jobs between August 2013 and August 2014. The greatest gains were seen in two of the Regionís largest sectors, Professional & Business Services and Educational & Health Services with a combined gain of 13,500 jobs. Manufacturing posted the third-largest gain, 1,500 jobs, despite losses seen at the statewide level. Construction and Government added 1,400 jobs each and Trade, Transportation, & Utilities posted its smallest job gain, 800 jobs, since mid-2011. Two sectors did not add jobs in this time period while the Other Services, Information, and Leisure & Hospitality sectors lost jobs in the past 12 months with a combined loss of 1,500 jobs. With a net gain of 17,100 jobs, the Regionís total Nonfarm employment level moved up to 919,900óstill at levels seen in the year 2005. This employment level is 69,300 jobs above the low point in the recent recession (winter of 2011), but 48,000 jobs below the pre-recession peak from the summer of 2007.

Major Sector Annual Job Gains and Losses

TOTAL REGIONAL EMPLOYMENT ARE AROUND 2005 LEVELS

Similar to the Sacramento Region, the Professional & Business Services and Educational & Health Services sectors posted the greatest gains statewide. The stateís Financial Activities, Government, and Manufacturing sectors lost jobs in the 12 months ending August 2014. All of the SF Bay Areaís sectors, except Mining & Logging, posted job gains with Educational & Health Services and Professional & Business Services posting the largest gains. Stockton posted significant job losses in the Manufacturing sector, a large proportion of the losses seen statewide in that sector. Professional & Business Services added the most jobs in Stockton while this sector was the only one that experienced losses in Solano. Solano saw its largest job gains in the Construction and Educational & Health Services sectors.

Sacramento Region Total Nonfarm Employment

THE REGIONíS UNEMPLOYMENT RATE REMAINS EVEN WITH THE STATE

Around 89,000 residents in the Sacramento Region were officially considered unemployed in August 2014, according to preliminary data. This put the Regionís August 2014 seasonally adjusted annual average unemployment rate at 8.0 percent, the same as the statewide average and 1.5 percentage points below Sacramentoís August 2013 rate. The unemployment rate continued to improve at the national level with an annual decline of 1.0 percentage point, dropping to 6.6 percent. The SF Bay Area posted an unemployment rate of 5.8 percent in August 2014, notably below the national benchmark. The Solano marketís unemployment rate remained between the statewide and national averages at 7.5 percent while the Stockton market is still seeing a double-digit unemployment rate at 11.7 percent.

Unemployment Rate (Seasonally Adjusted Annual Average)