California's unemployment fell below 10% in November for the first time in almost four years, thanks in part to a holiday hiring surge by retailers.
The jobless rate fell to 9.8% from 10.1% in October, according to data in an overall jobs report released Friday by the state Employment Development Department.
The drop in the unemployment rate, based on a survey of households, came even as a separate payroll survey found that employers shed a net 3,800 jobs in California, according to the report.
"The state showed a very significant and encouraging drop in the unemployment rate. A fall below 10% is welcome news," said Lynn Reaser, chief economist at the Fermanian Business & Economic Institute at Point Loma Nazarene University.
For months, economic forecasts have said the unemployment rate would stay above 10% well into next year.
The state's labor force — those who are employed or looking for jobs — grew by 34,100 people in November. That typically indicates that job seekers feel encouraged to resume looking for work.
A growing number of people working as independent contractors and in sole proprietorships, a figure not caught in the payroll survey, helped to explain the seeming incongruity of a growing labor force, falling employment rate and net loss of jobs.
"The good news in California was that we saw more people looking for work and more people getting jobs," Reaser said. "But the bad news was that the nonfarm payroll survey, which is usually the more reliable source, showed a small drop in employment ... and comes as quite a disappointment."
The biggest drop in jobs — 11,000 — came in the educational and health services sector. The manufacturing sector lost 8,900 positions. The biggest gains came in retail, which added 15,900 jobs.
Some economists were skeptical of November's report, particularly losses reported in the healthcare and professional and business services sectors.
"Over the last year, [these sectors] have been very strong," said Christopher Thornberg, founding principal at Beacon Economics, a Los Angeles consulting firm. "Why should it turn on a dime?"
Thornberg pointed out that healthcare has been resilient, expanding even through the economic recession.
He said he expects that November's job report will be revised early next year and that the loss in payroll jobs probably will be reversed.
The report "is not as good as what the household survey says, but it's not as bad as the payroll survey," Thornberg said. "None of this should be a surprise to us. California's economy has clearly been gaining strength."
In recent months, retailers beefed up payrolls on expectations of an unusually strong holiday shopping season. The National Retail Federation predicted holiday retail sales of $586.1 billion this year, up 4.1% from last year — and the highest level in decades, according to retail experts.
The trade, transportation and utilities sector, which includes retail, notched the largest increase from October, adding 12,900 jobs. Leisure and hospitality added 3,300 jobs. Construction, aided by a housing recovery, gained 1,700 jobs last month.
Esmael Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University, called the report a "mixed bag."
"Overall, yes, unemployment went down," Adibi said. "Some people will see that as good news, but the question will be: Is this downtick going to be sustainable?"
Adibi said an increase of 78,000 in the civilian employment figures shows more Californians becoming self-employed, a sign that companies have been reluctant to hire. Household surveys take those people into account; payroll surveys don't.
"Firms are laying people off," Adibi said. "So in October and November, we've seen a surge of self-employment."
Jobless rate falls below 10% in California
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Jobless rate falls below 10% in California
