The Sacramento Region is showing improving job growth, surpassing the Bay Area in April 2007

May 2007
EMPLOYMENT GROWTH IN THE SACRAMENTO REGION, THE BAY AREA, CALIFORNIA, AND THE UNITED STATES

The Sacramento Region is showing improving job growth, surpassing the Bay Area in April 2007 as well as the statewide and national averages.

Job growth in the six-county Sacramento Region continued to improve through April 2007, reaching the same level of growth as its previous peak in June 2006. During the 12 months ending April 2007, the Region added 26,200 jobs with a growth rate of 2.8 percent. For most of the past year, the Region was feeling the effects of weakening growth in housing-related sectors, but this pattern turned around last month primarily due to expanded growth in the Construction; Professional & Business Services; and Other Services sectors. For the past two months, the Region surpassed the statewide and national averages and once again topped the Bay Area’s job growth in April 2007.

The state has shown a fairly flat job growth pattern over the past year, averaging about 1.8 percent. The stagnant growth pattern is a result of the lingering effects of housing-related slowdowns. Between April 2006 and 2007, the state posted a 1.9 percent employment growth rate, adding 277,400 jobs. This rate of growth marks a slight improvement over the last two months and is above the rate for the same month last year. The state’s job growth has exceeded the national average since January 2007 primarily due to declining growth at the national level.

The nation is now experiencing a declining job growth pattern, shifting from the relatively flat growth trend it was seeing at the same time last year. The nation’s 1.4 percent year-over-year growth rate in April 2007 (a gain of 1.9 million jobs) is its lowest point since September 2004 and is notably less than the 1.9 percent job growth it posted in April 2006. Similar to California, the housing downturn is affecting the nation’s job growth picture with recent declines pushing it below the statewide average.

For the past year, the Bay Area has posted job growth above 2.0 percent, reflecting the momentum of the Bay Area’s economy following its recovery. Although it is slightly lower than the recent peak in January 2007, the 2.3 percent employment growth rate in April 2007 (an increase of 66,400 jobs) is considerably stronger than the Bay Area’s growth rate for the same month last year, which, at that point, was a vast improvement over most of the preceding five years. Despite being passed up by the Sacramento Region in April 2007, the Bay Area’s job growth has exceeded the statewide and national averages since May 2006.


Job Growth
Sacramento Region, Bay Area, California, and United States


Sacramento Regional Research Institute, May 2007
Data Source: Employment Development Department and Bureau of Labor Statistics
Notes: Sacramento Region includes the Sacramento-Arden Arcade-Roseville and Yuba City MSAs. Bay Area includes
the Oakland-Fremont-Hayward MD, San Francisco-San Mateo-Redwood City MD, and San Jose-Sunnyvale-Santa
Clara MSA.
Job growth reflects year-over-year Nonfarm employment growth rates.


Major Sector Employment Gains and Losses
Sacramento Region, California, and Bay Area

Sacramento Regional Research Institute, May 2007
Data Source: Employment Development Department

The Sacramento Region’s Construction sector posted positive job growth for the second straight month while Government continued to show the greatest employment gains in April 2007.

For the second straight month, the Sacramento Region’s Government; Educational & Health Services; and Professional & Business Services sectors added the most jobs among the major sectors during the 12 months ending April 2007. Combined, these three sectors contributed 15,900 to the Region’s economy, accounting for approximately 61 percent of the net gains between April 2006 and 2007. Continued improvements in the Professional & Business Services sector allowed it to remain among the top three sectors, while Construction posted positive growth for the second month in a row (as a result of commercial market activity), moving to fourth place among the Region’s major sectors. Only Manufacturing saw year-over-year job losses, continuing its nine-month trend of negative and declining job growth.

The state’s leading sectors also included Professional & Business Services; Government; and Educational & Health Services, adding a total of 156,800 jobs in the past 12 months (about 57 percent of the state’s net gain). Similar to the Sacramento Region, statewide, Construction saw its second straight month of positive growth while Manufacturing continued its long-term pattern of job losses.

For the past 12 months, every major sector in the Bay Area has posted year-over-year job gains. Between April 2006 and 2007, Professional & Business Services, Educational & Health Services; and Trade, Transportation, & Utilities topped the list of major sectors with a combined increase of 37,500 jobs (making up nearly 57 percent of the Bay Area’s net gain).