More Good News than Bad in Calif.'s May Jobs Report

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California’s new jobs numbers are out. They show a sharp drop in unemployment, but just modest new hiring from employers. Instead, it’s self-employment that’s driving the jobless rate down – and that’s not necessarily bad for the economy.

California’s unemployment rate dropped from nine percent in April to 8.6 percent in May.

Typically, during this sluggish recovery, economists often say drops in the jobless rate are due to people leaving the workforce.  But this time, “It seems like as people are coming back to the job market, the pace of job creation is stronger than that growth,” says Chapman University economist Esmael Adibi.  “That’s why unemployment is going down.  And that’s good news.”

Chapman University economist Esmael Adibi says a rise in the number of people who say they’re self-employed offset slow payroll job growth.  Businesses added just 10,000 jobs last month – the same as the month before.  But overall, the state labor force jumped by more than 90,000, thanks to the increase in freelancers, consultants and contractors.  And that, Adibi says, is why unemployment dropped nearly half a point.

Meanwhile, the number of Sacramento area restaurant, hotel and other “leisure and hospitality” jobs grew by 700 last month. 

It was the largest April-to-May increase in that job sector in 22 years and it helped lower the local jobless rate to 7.8% in May…down from 8.2% in April. 

A year ago, the Sacramento area unemployment rate was 10.3%. 

All told, the four-county region gained 4,900 jobs in May with big gains in: agriculture; professional and business services; and administrative and support services.

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