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Long road to economic recovery, finds report

POSTED September 2, 2011 10:25 p.m.

A new report of labor data shows California making progress on unemployment rates but predicts that the road to a full recovery is going to be long and slow moving.

The Economic Development Department looked at  labor data through July and found that unemployment in most areas of the state has begun to trend downward and that job growth was returning to the private sector, albeit slowly.

The San Joaquin Valley, which includes Stanislaus, Merced and San Joaquin counties, is one of the regions that continually posts high unemployment numbers and has yet to see long-lasting declines. However, the report found a few bright spots for the Valley.

According to the EDD report, the San Joaquin Valley saw a 0.5 percent year-over gain in nonfarm jobs in July, in part due to job growth in green industries, particularly energy-related fields. The region also experienced the largest improvements in its employment situation over the course of 2010, compared to the other regions.

“However, regional construction jobs fell by 4.3 percent over the last year, suggesting that lingering problems in the San Joaquin Valley’s overbuilt housing markets continue to hold the regional economy back,” the report stated.

California nonfarm payroll jobs grew by 189,400 jobs over the year ending in July. This was the state’s strongest year-over job growth of any July since 2006, and a sharp improvement from July 2010 and July 2009, when California experienced year-over losses of 51,600 jobs and 1,080,100 jobs, respectively. The state also gained about 116,000 nonfarm jobs in the first seven months of 2011.

Job growth in California has outpaced the nation’s in recent months, according to the EDD. California’s nonfarm employment grew by 1.4 percent over the year, ending in July, while it grew 1 percent nationally.

The private sector was also showing some improvements. California gained 222,400 private nonfarm jobs over the year ending in July, including 113,300 in the first seven months.

“Although job growth has returned to California, the state has a long way to go before it recovers all the jobs it lost during the recession,” the report states. “In July 2011, total nonfarm employment remained over 1.1 million jobs below its pre-recession peak. Private sector employment was 1 million jobs below its pre-recession peak.”

Among the industries that saw job growth over the year, the professional and business sector had the greatest gain with 59,400 over the year ending in July. According to the EDD, most of the gains in that sector were among the professional, scientific and technical services subsector, which gained 35,500 jobs.

The Educational and Health Services sector totaled 50,200 jobs in July, which was the sector’s largest year-over job gain of any July since 2007.

Other sectors seeing year-over gains were: Leisure and Hospitality (38,900); Information (30,000); Construction (13,100); and Manufacturing (15,000). This was Manufacturing’s largest year-over gain during any July since 2000, according to the EDD.

“California’s Government sector was the biggest drag on overall job growth over the last year, as the state and local governments continued to grapple with the budgetary aftermath of the recession,” the report states.

The Government sector lost 33,000 jobs over the year. Although 18,800 of these jobs were in federal government, temporary U.S. Census hiring in 2010 skews the total, the EDD said. Year-over losses in state and local governments totaled 3,500 and 10,700 jobs, respectively, in July.

To contact Sabra Stafford, e-mail sstafford@turlockjournal.com or call 634-9141 ext. 2002.

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