Test: What was the only state in the U.S. that didn't lose jobs?
As we pass the first anniversary of the September financial meltdown, the breathtaking decline is over and signs are growing that the global recession is at or near its end.
France, Germany, Japan and China have reported GDP growth. The revised U.S. GDP data show that the second quarter's decline was at an annual rate of 1 percent, a far cry from the revised 5.4 percent to 6.4 percent range of the previous two quarters. Pending home sales, residential permits and resales have all perked up, albeit from abysmal levels.
The Cash for Clunkers program helped move nearly 700,000 vehicles – depleting inventories and necessitating increased production. The question now is what will happen later this year? Were sales simply moved in time?
Industrial production rose in July for the first time since the recession began – other than a 2008 hurricane distortion. Although it is little comfort, the rate of decline in payroll jobs has diminished with August data showing a net drop of 216,000 jobs. The only sectors with seasonally adjusted gains were education and health services.
Price pressures remain subdued with the annual change in the Consumer Price Index in July a minus 2.1 percent – the fifth consecutive month with a lower year-over-year price level. Contracts indexed to the CPI will confront a decline – something that might not have been anticipated.
Near turning points the data is mixed, the negative equity/foreclosure problems remain, and commercial real estate issues loom, but the worst of the decline has passed. Leading indicators are rising, and global policy makers are starting to think about the timing and the process of unwinding the stimulus measures in the coming years. The shape of the recovery is a current focus.
Historically sharp downturns are followed by sharp upturns, but housing is not going to play its customary role. Consumers have seen large wealth losses and are deleveraging (reducing debt loads). Uncertainty abounds in medical care, cap-and-trade and in credit markets.
This cycle was different on the downside and is likely to be the same on the upside.
For California, wage and salary employment fell in July for the 15th consecutive month. The decline was 35,800, but as in the nation the decline was at a slower rate than seen earlier this year.
The statewide unemployment rate went to 11.9 percent, up from 7.3 percent in July of 2008. Over the month, only two sectors saw adjusted gains, professional and business services and leisure and hospitality. Over the year, only education and health services increased. Statewide, non-ag wage and salary jobs fell by 5 percent, or 575,900 jobs. Job Growth Update indicates that California ranked 42nd in July – all states but North Dakota had annual declines with Michigan, Nevada and Arizona in the bottom three.
In the Santa Rosa Metropolitan Area, July employment was down 5.7 percent, or by 10,400 jobs over the year. None of the major non-agricultural sectors saw employment gains, but education, health services, information and mining and logging were unchanged. The unemployment rate was 10.3 percent, up from 6 percent the previous year.