Revisions Move Labor Market Slowdown to October

by Brian Thomas and Noah Newman | Dec 8, 2015

The latest employment report from the California Employment Development Department shows slow labor market growth in October. Total civilian employment increased by a mere 0.03%, the slowest growth in six months, while nonfarm payrolls and total employment for all industries declined by about 0.1% in the last month. Moreover, the Santa Barbara County unemployment rate increased by 0.19 percentage points in October, to a current seasonally adjusted rate of 4.92%. Some good news in the latest report is growth in the labor force, which increased by 1,449 workers (0.3%).  


The previously reported employment figures from September were revised upwards.  An additional 900 workers were added to non-adjusted civilian employment and 1,200 jobs were added to non-adjusted non-farm payrolls. These revisions significantly change the story for labor markets in September, which now appear to have had quite strong employment growth.  Although seasonally adjusted civilian employment growth was still relatively low in September after the revisions, at 0.11%, both nonfarm payrolls and total employment for all industries grew rapidly at 0.45% and 0.48%, respectively.    


Among industries, half of the 2-digit NAICS industries grew during October. The information industry had the largest increase in employment (0.84%) and the transportation, warehousing & utilities industry had the largest decline (-1.75%). The government sector, which is the largest employer in Santa Barbara County with 19.3% of total employment, had an employment decline of 0.78% during October.  


Leisure and hospitality remains the fastest growing industry by employment over the last year, with a current annual growth rate of 11.49%. The second fastest growing industry is professional and business services at 5.67%. Only three industries have had employment declines since October 2014.  Those industries are education & health services, farm, and information with declines of 0.69%, 0.24%, and 0.07%, respectively. The industry employment diffusion index, a measure of what percentage of industries increased employment over a certain period of time, remains strong with 73% of industries over the past six months and 67% over the past twelve months. 


In terms of sub-county employment, the areas with the largest employment growth are Carpinteria and Isla Vista, at 0.56% and 0.38%, respectively. The areas with the largest declines in employment were Orcutt and Santa Maria, at -0.20% and -0.02%, respectively. Every sub-county place in Santa Barbara County had an increase in its unemployment rate during October. Despite this across the board increase in the last month, all cities in the county still have seen a drop in the unemployment rate since last year, ranging from Isla Vista’s decrease of 1.42 percentage points to Goleta’s decrease of 0.51 percentage points.