(The Center Square) — New-hire growth in California fell to 6,500 nonfarm payroll jobs in September from 19,900 in August. The slowdown in payroll expansion came as the Golden State unemployment rate fell to 3.9% in September from 4.1% in August, according at the State Employment Development Department.
California employment data comes from two separate federal surveys. The unemployment rate comes from a federal survey of 5,100 California households. A federal survey of 80,000 California businesses provides data on nonfarm payroll employment.
Amid mixed economic signals in California, the national unemployment rate was 3.5% in September from 3.7% in August. National employment data collection federal household and establishment surveys took place before Hurricane Ian hit Florida.
In September, five of California’s 11 industrial sectors added nonfarm payroll jobs, down from seven with hiring growth in August. Employment in education and health services, with 15,000 new hires in September, led the way. Growth in hiring at colleges, universities and vocational schools has boosted employment numbers in this sector, according to the state’s EDD.
California leisure and hospitality employers, hard hit by the 2020 pandemic, added 8,700 jobs in September. Job growth in this sector is due to the expansion of special food services like catering and food trucks, according to the state EDD.
Meanwhile, the government payroll cut 16,100 jobs in September. The statewide decline was due to a slowdown in local government hiring, particularly in administration and services.
Worsening drought is hurting agricultural employment in California. Producers are reducing their harvests due to the lack of rain. Farm payrolls lost 700 jobs in September.
California’s unemployment rate across its 58 counties varied widely, with large differences between coastal and inland areas. For example, the lowest unemployment rate in the state is 1.9% in San Mateo County north of Silicon Valley, compared to a high of 16.0% in Imperial County east of San Diego.
California, as the nation’s largest economy, is not immune to the effects of central bank policy to fight inflation, a general rise in prices, to its highest level in 40 years currently. As a result, raising interest rates by the Federal Reserve Bank raises the price of borrowing for the businesses and consumers they serve. Rising unemployment could be another part of this scenario.