California’s economic engine paused in June, as employers added a meager 800 new jobs. The unemployment rate held steady at a record low of 4.2%, according to data released Friday by the state’s Employment Development Department.
The June numbers represent a pullback from May, when the Golden State added 7,200 jobs. And the gains in May were much smaller than April, when employers boosted payrolls by nearly 26,000.
The slowdown could signal that California is simply reaching full employment. Employers are struggling to find workers. Or it could be a sign of sagging confidence among executives. A growing trade war with China, for example, has unnerved companies in California’s logistics industry and beyond.
Economists, however, cautioned against reading too much into one or two months of data.
Lynn Reaser, chief economist of the Fermanian Business and Economic Institute at Point Loma Nazarene University, said June’s disappointing figures “warrant attention” and could be a sign of uncertainty around trade. But they are not cause for “undue alarm at this point.”
“June’s weak performance could be temporary,” she said in an email.
Others said it was too early to see effects from the tariffs the Trump administration has placed on Chinese goods. An initial levy on $34 billion of Chinese goods, along with countermeasures by China, took effect in July following months of tariff threats and saber-rattling between the world’s two largest economies. More tariffs have been threatened.
Michael Bernick, an attorney with Duane Morris and a former director of the Employment Development Department, said the slowdown was expected after a sustained stretch of job growth, noting that the current economic expansion is now the second longest in the post-World War II period.
“California has a broad and diverse economy, and we’re now in our 99th month of employment expansion,” he said in an email.
Last month, employers in four of California’s 11 industry sectors added jobs.
The education and health services sector gained the most, growing by 8,000 jobs. The information sector, which includes tech companies and Hollywood studios, grew by 4,600 jobs.
Employers in the government sector and the professional and business services sector also added jobs.
The other seven sectors saw job losses. Leisure and hospitality cut 4,000 jobs. The construction sector shrank by 2,900. Trade, transportation and utilities lost 2,600 jobs. Employers in manufacturing, finance, mining and logging and “other services” also trimmed payrolls.
Wages, meanwhile, rose 2.6% in California from the previous year, to $30.42 an hour, according to the federal Bureau of Labor Statistics, barely keeping up with the national increase in consumer prices. (The agency does not publish consumer inflation data for individual states.)
The number of jobs in Los Angeles County rose by 8,800. Employers in San Bernardino and Riverside counties added 3,400 jobs, while San Diego County employers cut 5,400. The number of jobs in Ventura County fell by 300. Orange County lost 100 jobs.
Across Los Angeles and Orange counties, wages rose 4.8%, to $29.39 an hour, though inflation took out a chunk of those gains.
So-called core inflation — consumer prices minus volatile food and energy costs — rose 3.5% in Los Angeles and Orange counties.
Sung Won Sohn, chief economist with Los Angeles consulting firm SS Economics, blamed June’s poor jobs figures partly on sky-high housing costs that make it difficult for employers to recruit and retain workers.
He noted that the number of people in the labor force — either those employed or looking for work — has been falling in recent months.
Dave Smith, an economist at the Pepperdine University Graziadio Business School, said that absent an increase in immigration, “we are just not at a capacity to add a lot more jobs.”
Bernick and others said that the economy appears mostly healthy despite the poor June numbers. But Bernick said federal trade policy could hamper further job growth.
“A widening trade war is the main threat to California’s continued employment expansion,” he said.