U.S. economy added 80,000 jobs in October, fewer than expected

The nation’s economy continued to grow sluggishly in October, adding just 80,000 jobs as concerns about the future weighed on employers and consumers, curtailing both hiring and spending.

The unemployment rate dipped slightly, to 9.0% from 9.1% the month before, and the government revised upwards employment figures from both August and September. But the economy still isn’t creating the 125,000 jobs a month economists say are needed to bring down the unemployment rate.

“Employers are riding a turtle when we were hoping they’d get on a Thoroughbred,” said Patrick O’Keefe, a former assistant secretary at the Department of Labor who is now director of economic research at accounting firm J.H. Cohn.

The service sector led growth in the month, continuing the nation's shift to a service-heavy economy. Retail trade grew by 17,800 jobs and transportation and warehousing added 9,400. Professional and business services gained 32,000 positions and educational and health services added 28,000.

After a burst of activity earlier this year, manufacturing seems to be losing steam. That sector gained just 5,000 jobs in October, and a separate report released earlier this week by Automatic Data Processing Inc. said that the manufacturing industry shed 8,000 jobs last month.

Government and construction are also struggling. Cuts in state positions dragged down the government sector, which lost 24,000 jobs. Construction shed 20,000 positions.

Economy added 80,000 jobs in October; unemployment rate at 9%

Employers added just 80,000 jobs to payrolls in October, fewer than analysts had expected, as cuts in the government and construction sectors continued to weigh down the national economy. The unemployment rate dipped only slightly, to 9.0% from 9.1% the month before, according to new data from the Bureau of Labor Statistics.

Still, the government revised employment figures from previous months, saying the economy had added 158,000 jobs in September, more than the 103,000 than previously reported, and that it had gained 104,000 in August, nearly double the number it had previously reported for that month. Those revisions indicate that the economy is on firmer footing than it seemed to be just a few months ago, analysts say.

"I don't think there's any sign of a recession in this report," said Ryan Sweet, senior economist at Moody's Analytics. "Going forward, the labor market isn't booming, but I don't think there are any signs we're going to take a significant step back."

Private-sector employment led the growth in October, adding 104,000 jobs. The professional and business services, healthcare and leisure and hospitality sectors all performed well. The government sector shed 24,000 jobs and construction lost 20,000.

A separate report released earlier this week by Automatic Data Processing Inc. said that private sector employers added 110,000 jobs in October, buoyed by strength in service-providing sectors. Manufacturing growth slowed last month, the company said, as the industry shed 8,000 jobs.

Despite the job growth, many workers say that the positions being created are of lower quality than the ones they held before the recession. Wages and salaries grew just 0.3% in the three months ending Monday and benefits grew only 0.1%, according to the Bureau of Labor Statistics.

Kevin Friedlander knows it. The 22-year-old Las Vegas resident got laid off from a warehousing job last month and is scrambling to find new work to support his wife and daughter. Each job he’s had since  he got out of the military three years ago pays less and seems more temporary than the one before, he said.

“With almost every job I’ve  had, every day I’ve gone into work it felt like it could be my last day,” he said. “Nothing feels secure, nothing feels stable.”

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Photo: Job seekers at a career fair in Minneapolis. Credit: Jim Moore/Associated Press

ADP: Private employers added 110,000 jobs in October

Private sector employers added 110,000 jobs to payrolls last month, led by hiring among small- and medium-sized businesses, according to a report by Automatic Data Processing Inc., or ADP. The firm provides a monthly jobs report in advance of the government's official tally, to be released Friday.

ADP also said that private sector employers added 116,000 jobs in September, more than the 91,000 the firm had previously reported.

The ADP report does not include government employment, which has been falling consistently, and shed 34,000 jobs in September. State and local governments have jettisoned 641,000 jobs over the last three years, according to the Economic Policy Institute. A shrinking government sector is helping keep the unemployment rate elevated even as the country adds jobs.

"The recent trend in private employment is probably below a pace consistent with a stable unemployment rate and reflects the sluggish pace of GDP growth exhibited earlier this year," said Joel Prakken, chairman of Macroeconomic Advisers LLC, which puts out the jobs report with ADP.

Medium-sized businesses added 53,000 jobs in October, while small businesses -- those with 50 to 499 employees -- added 53,000, ADP said. Large companies lost 1,000 jobs.

Gains were concentrated in service-providing sectors, which added 114,000 positions. Goods-producing sectors shed 4,000 jobs. Manufacturing shed 8,000 jobs, ADP said.

Other signs indicate that manufacturing slowed in October. The ISM Manufacturing Index was 50.8 in October, showing very slight expansion, down from 51.6 in September. A number above 50 indicates growth. Although new orders improved, a good sign, companies cut back on inventories because of fears about the future, according to Nigel Gault of IHS Global Insight.

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Photo: A Whirlpool operations plant in Ohio. Whirlpool said it would cut 5,000 jobs after demand fell. Credit: Daniel Acker / Bloomberg

Crowded labor market drives lackluster wage growth

A labor market flooded with unemployed workers continued to put downward pressure on wages and compensation in the last three months, according to employment cost data released Friday by the Bureau of Labor Statistics. Wages and salaries increased just 0.3% in the third quarter of 2011, while benefits increased just 0.1%, the slowest growth rate since 1999.

Wages and salaries grew 1.6% in the 12 months ending Sept. 30, while benefits rose 3.2%. Benefits have grown faster than wages and salaries over the past two years. In the quarter, the overall employment cost index rose at the slowest pace in two years.

Compensation was dragged down by flat salaries for state and local government workers. Their pay increased just 1.5% over the year, the slowest growth since the data started being recorded in 1982. (In June 1982, state and local government compensation grew 8.5% over the year). That's just one more sign that state and local government positions, once seen as work that came with job security, pensions and stable pay, are no longer the sinecures they once were.

In the three months ending Sept. 30, wages and salaries in the private sector grew in financial activities and insurance, 0.8% and 0.9%, respectively, and in installation and repair. They shrank in the public sector in education, especially among elementary and secondary school employees.

Total compensation, which includes benefits, grew the fastest in the Detroit area over the year -- 4.9%. It rose just 1.9% in the Los Angeles area, and 2.9% in the Phoenix area. If benefits are taken out, wages and salaries grew the fastest in the Minneapolis region over the year, 2.5%, followed closely by Boston and Houston. They grew the slowest in Los Angeles, just 1.3%.

These growth rates aren't likely to speed up until the unemployment rate shrinks, wrote Gregory Daco, an economist with IHS Global Insight.

"With the unemployment rate at 9.1%, ongoing labor market slack should continue to put downward pressure on employment costs," he wrote. "While this is good news for business, it does not bode well for U.S. households whose real disposable incomes fell 1.7% in the third quarter -- the biggest drop since the third quarter of 2009."

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Photo: Job seekers in Oakland. Credit: Justin Sullivan/Getty Images

 

 

Wages of top 1% rise much faster than bottom 90%

Income growth for the top 1% of households has far outpaced that of all other households over the last two decades, bolstering the theory advanced by groups such as Occupy Wall Street that conditions are improving much more quickly for people outside the "99%."

An economic snapshot from the Economic Policy Institute shows that inflation-adjusted incomes of the top 1% of households increased 224% from 1979 to 2007, while incomes for the bottom 90% grew just 5% in the same time period. Those in the top 0.1% of income fared even better, with incomes growing 390% over that time period.

The top 1% of households still fare well from President Bush-era tax cuts and from a decrease in the estate tax, according to the EPI. Its authors argue, in a separate paper, that in light of these rising incomes, high-income households should be taxed more to reduce the deficit.

The average tax rate for the top 1% of households has fallen since 1979, even as their incomes rose. High-income households paid a tax rate of about 37% in 1979 and about 29.5% in 2007.

Taxes are a hot topic these days in light of proposals by Republican presidential candidates to change the tax code. Herman Cain would scrap the current progressive income tax system and replace it with a 9% income tax, as well as a 9% sales tax and a 9% corporate tax.

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Chart courtesy of EPI

Industrial production shows gains in September

The country's machines continued to whir in September, as industrial production increased 0.2% after remaining unchanged in August, boosted by strong manufacturing figures. Industrial production rose 5.1% in the third quarter.

Manufacturing, once a sector all but left for dead in the U.S. economy, is playing a big role in the country's recovery. Auto companies are making cars again, spurring demand for suppliers and parts manufacturers. Production of motor vehicles and parts rose 0.7% in September.

In the third quarter, the output of business equipment rose 12.6% and the output of transit equipment — including trucks and civilian aircraft — jumped 31.8% in September, according to the report from the Federal Reserve.

As the dollar loses value, more companies are expanding U.S. manufacturing operations at the expense of their overseas ones, said Mitch Free, chief executive of MFG.com, a website that connects businesses and factories. They often produce smaller batches of goods in the U.S. because they don't have to ship them in bulk, he said, which may be leading to the relatively slow growth.

"I think it's still touch-and-go," he said.

Production of food, beverage and tobacco products grew in the third quarter after declining the previous quarter.

"This is a 'not-bad' report," said Patrick Newport, of IHS Global Insight, in a note. "It shows the manufacturing sector moving forward during September, though at an uninspiring rate during a very rocky quarter."

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Photo: Workers assemble truck components at a Volvo plant in Virginia. Credit: Steve Helber / Associated Press

California unemployment rate rises to 12.1% in August

California's unemployment rate ticked up a notch in August, to 12.1% from 12% the month before, according to new data from the  U.S. Bureau of Labor Statistics. Employers shed 8,400 jobs from payrolls.

The numbers were little surprise to economists, who had anticipated no growth after national data showed that employers added no jobs nationally in August, when the U.S. unemployment rate stayed steady at 9.1%.

"Businesses are very reluctant to hire people," said Sung Won Sohn, an economist at Cal State Channel Islands in Camarillo. "The last thing they want to do is hire people and then fire them again a few months later."

California has the second-highest unemployment rate in the nation, after Nevada, where 13.4% of the people in the labor force are out of work.

California  lost jobs in construction, financial activities and government. Sohn says that California's dependence on the real estate industry is going to continue to cause pain until home-building starts again. But with uncertainty throughout the economy, few businesses in any field seem willing to hire.

"Businesses are adopting a wait-and-see attitude," he said.

Jesse Medel just wants a job. The 37-year-old recently got out of prison, and says his chances of finding work are slim, since there are so many other people looking. It's much different than when he last looked for employment, five years ago.

"It's bad out there," he said. "I'm competing against kids with college degrees for entry-level jobs."

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Photo: A job fair for veterans in Culver City. Credit: Francine Orr/Los Angeles Times

GDP grows in metro areas, including a turnaround in Indiana

Metropolitan areas across the country began to bounce back in 2010, producing more goods and services than they had in 2009, but areas across the West, including some in California, continued to stagnate, according to the Bureau of Labor Statistics. Real gross domestic product by metropolitan area increased by 2.5% last year, after declining 2.5% the year before, the bureau said. It grew in 304 of 366 metro areas.

The Los Angeles metro area had the second-highest GDP in the nation last year, $670 billion, a 2.5% increase from the previous year. The New York metropolitan area still leads the nation in GDP at $1.3 trillion.

Information and professional and business services led GDP growth in Los Angeles in 2010, the bureau said, while government, construction and transportation slowed it down. Areas where construction was a heavier burden on the economy saw GDP drop last year, especially in the West. In Las Vegas, GDP fell 1.9%, mostly due to construction. In the Riverside-San Bernardino metro area, GDP slipped 0.6% because of declines in construction and manufacturing.

Of the country's largest metro areas, the three with the fastest GDP growth in 2010 were Boston-Cambridge-Quincy, which grew 4.8%, New York-northern New Jersey-Long Island, which grew 4.7%, and Washington-Arlington-Alexandria, which rose 3.6%. The Boston area's growth was led by strength in information, financial activities and professional and business services. New York saw huge growth in financial activities.

Contributing to GDP growth, manufacturing returned in many metropolitan areas in 2010, notably including portions of Indiana. Manufacturing boosted GDP in Elkhart-Goshen by 11.4 percentage points, leading to a whopping 13% rise in GDP. GDP in Columbus, Ind., grew by 10.1% over the year.

The Elkhart-Goshen area could be considered a positive story in the economic recovery. Elkhart County had an unemployment rate of 20.3% in March 2009, and was visited by President Obama that year as he pushed his stimulus bill. The unemployment rate has since fallen to 10.6%. Growing demand for Humvees and RVs helped put some people back to work, economists say.

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Photo: President Obama in Elkhart, Ind., in 2009. Credit: Charles Dharapak / Associated Press

Census: Nearly 1 in 5 Californians lack health insurance

 
New U.S. Census figures paint a grim picture of California when it comes to health insurance: Nearly one in five residents lacked coverage on average during the last three years, one of the highest rates in the nation.

On average from 2008 to 2010, 18.9% of Californians had no insurance, the census reported. That equates to nearly 7 million people.

Nationally, 15.8% of Americans -– or nearly 48 million people -– went without health insurance on average during the three-year period, the census reported.

California was among the top seven states with the highest average rates.

It fell behind Texas (24.8%), New Mexico (21.8%), Florida (20.7%), Nevada (20.0%), Arizona (19.1%) and Georgia (19.0%).

The census also showed that the absence of insurance is a growing problem in California and nationally, largely the result of employers laying off workers and cutting health benefits during the recession.

In California, 19.4% of people on average had no insurance in 2009-2010. That was up from 17.8% in 2007-2008.

Nationally, the figures were 16.2% in 2009-10 and 14.8% in 2007-08.

“The depth of the problem has gotten worse,” said Shana Alex Lavarreda, director of health insurance studies at the UCLA Center for Health Policy Research. “The private sector is not able to cover this population.”

Lavarreda and other healthcare analysts said the figures underscore the need for healthcare reform. They point out that the federal healthcare overhaul will require millions of Americans to buy insurance, starting in 2014, and will provide subsidies for those who can’t afford it.

An estimated 4.7 million uninsured Californians will be eligible for insurance when the new requirement takes effect, the UCLA center estimated. Many will get subsidies or receive coverage through Medi-Cal, the joint state-federal insurance program for the poor.

“That’s when we’ll see the numbers of uninsured drop,” Lavarreda said.

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Credit: Mel Melcon / Los Angeles Times

California workers may be undereducated for available jobs, study says

Unemployment may be high in some areas because workers just aren't educated enough, according to a new study by the Brookings Institution, which lends some credence to an economic theory that there is a structural problem in the nation creating unemployment.

That problem may be getting worse: The years of schooling required by the average job grew between 2005 and 2009, the study says, outpacing the growth in the supply of educated workers.  

"This report provides evidence that there is an education gap in most metropolitan areas, and that this gap is responsible for higher unemployment," said Jonathan Rothwell, one of the authors of the study, Education, Demand and Unemployment in Metropolitan America.

An education gap is when the demand for educated workers is greater than the supply in any given market. Brookings calculated the gap by taking the years of schooling required to do jobs in an area and dividing it by the years of education attained by the average working person there. 

The Riverside-San Bernardino-Ontario area had one of the highest education gaps in the nation, on average, between 2005 and 2009. Its ratio was 1.026, the fourth-highest after Chattanooga, Tenn.; Lakeland, Fla.; and Youngstown, Ohio. 

The average job in the Riverside area required 13.35 years of education in 2009, the most recent data available, while the average working resident had 12.92 years of education, Rothwell said. In the Los Angeles area, the average job required 13.58 years of education, while residents had, on average, 13.38 years.

Across the nation, this gap has been exacerbated by the recession, Rothwell said, as construction and manufacturing jobs, which required less schooling, disappeared, while the health and education sectors continued to grow. But areas where the education gap was the highest, such as Riverside, had consistently higher unemployment rates than those that didn't.

They also fared worse during the recession. California areas including Stockton, Fresno and Modesto all saw their unemployment rates rise more than 8 percentage points from their pre-recession lows to May 2011. All were among those with the highest average education gaps. Areas such as Madison, Wis., and the Washington, D.C., metro area had the lowest education gaps, on average, and their unemployment rates changed just 1.9 and 2.7 percentage points, respectively, over that time.

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California exports return to pre-recession levels

Finally a bit of good news for the struggling U.S. economy -- exports jumped in July, indicating there is still global demand for U.S. goods. The Commerce Department said that exports grew by $6.2 billion in July, to $178 billion, thanks to increased demand for industrial supplies and automotive goods. Imports dropped slightly from June.

The growth in exports means the nation's trade deficit contracted in June by $6.8 billion, which is the largest monthly decline since February 2009, according to Gregory Daco, principal U.S. economist with IHS Global Insight.

"Demand for U.S. goods should continue to hold, supported by robust emerging markets growth and a historically weak U.S. dollar," he wrote, in a report.

California performed well on the export front too, according to an analysis by Beacon Economics. July was the 21st consecutive month in which the state's export trade increased on a year-over-year basis, said Jock O'Connell, international trade adviser to Beacon.

"We have resumed pre-recession levels of exporting," he said.

Exports of raw materials and agricultural products grew by 24.7% from the same month last year, while manufactured exports jumped 6.1%. California exported $13.15 billion worth of goods in July, which is 11% more than the state exported in July 2010.

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Photo: Increased exports helped keep the ports busy. Credit: Alana Semuels / Los Angeles Times

 

 

Despite growth in job openings, job seeker ratio remains high

Employers posted 3.2 million job openings in July, a slight uptick from June, as industries such as manufacturing, arts and entertainment added positions, according to new data from the Bureau of Labor Statistics. There were 1.1 million more job openings in July than there were the previous year, according to the Job Opening and Labor Turnover Summary, or JOLTS.

Good news, right? Not exactly. The labor market is still pretty grim. In July, there were 13.9 million unemployed workers, which means there's a 4.3-to-1 ratio of unemployed workers to job openings.  That's two years and seven months during which the job seeker's ratio has been "substantially above" 4-to-1, according to Heidi Shierholz with the Economic Policy Institute.

By comparison, the job seeker's ratio in December 2000 was 1.1 to 1. By industry, unemployment workers vastly outnumber openings in wholesale and retail trade, construction, leisure and hospitality, professional and business services, and education and health services.

The high ratio of unemployed workers to jobs manifests itself in long lines at job fairs, where dozens of people apply for the same position, and only one receives it, and in companies being swamped with so many resumes they can't even read them all.

This economy is creating significantly fewer jobs than economy has during previous recoveries, Shierholz writes. In the first 25 months of the recovery in the early 2000s -- December 2001 through December 2003 -- there were 85.4 million job openings in the recovery. Between July 2009 and July 2011, however there were just 68.4 million.

"Our labor market has a significant shortfall of new job openings even when measured against the exceptionally weak recovery of the early 2000s," Shierholz says.

What's holding back job growth? Demand. But what can create demand, few economists agree on.

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Graphic courtesy of the Economic Policy Institute

Is California economy improving, or worse than ever?

Depending on who you ask this Labor Day, California's economy is either on its way up or headed straight for the crapper.

A report released today by the California Budget Project finds that the state has a historically low level of employment, even as earnings are declining for most workers. By July, the report says, the state had gained back only one out of six jobs lost during the recession. The state added only 2,760 jobs a month between February and July.

Government is dragging down the economy, the report says. Over the last three years, the state has lost public sector jobs at a rate twice that of the nation as a whole, the report says. Inland areas aren't helping either -- between June 2010 and June 2011, the Inland Empire lost 10,300 jobs.

Finally, inflation-adjusted earnings in California declined 1.9% between 2006 and 2010, the report says, making a typical worker have less purchasing power in 2010 than at any point in the last 10 years.

"Coupled with the latest figures showing extremely slow growth in the national economy, these state trends make it clear that we're a long way from a recovery that makes a real difference for California's workers and their families," said the report's author, Alissa Anderson, deputy director of the California Budget Project.

But according to a Labor Day Briefing from the state Employment Development Department, California "has been gaining jobs at the fastest rate since the boom year of 2006" and more quickly than the nation as a whole. California is also outpacing the nation in private job growth, the EDD says.

The EDD says California added 189,400 jobs from July 2010 to July 2011, which is a 1.4% growth rate at a time when the nation's employment picture grew just 1%. The state's year-over-year July job growth rate is the strongest in five years.

Industries that managed to grow year over year in July included professional and business services, education and health services, and even construction, the EDD points out. It says there are occupations that are projected to grow in the state: executive secretaries, registered nurses and accountants.

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ADP jobs report shows paltry growth again

Economists are looking to Friday's jobs report with trepidation -- if the nation again adds a paltry number of jobs, fears of another recession will grow. But August job growth isn't likely to be impressive, according to the ADP National Employment Report, released Wednesday, which shows that employment in the private sector rose by just 91,000.

The average job growth during the previous three months has been just 72,000, which leaves millions still out of work. The nation added just 117,000 jobs in July.

ADP's National Employment Report, which focuses only on the private sector, showed gains in construction, which had shrunk for three months in a row. The service-providing sector provided the most employment growth. Employers with payrolls of fewer than 50 workers added the most jobs in August, while employers with more than 500 workers added the fewest.

The jobs report from the Bureau of Labor Statistics will include both private and government jobs. Economists say the private sector needs to perform well to offset losses in state and local governments, which are shedding jobs.

The firm Challenger, Gray and Christmas said Wednesday that employers planned to cut 51,114 workers from payrolls in August, fewer cuts than they had made in July. The government sector has announced more than 100,000 job cuts this year, the firm said.

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Photo: A job fair in Anaheim. Credit: Luis Sinco / Los Angeles Times

Construction employment continues to fall in California cities

Construction employment continued to slump in most of California's metropolitan areas in July, according to an analysis by the Associated General Contractors of America.

Employment fell 11% in Fresno in July from the same month the previous year. It dropped 5% in the Los Angeles metropolitan area and 4% in San Francisco.

Nationally, it increased in 136 out of 337 metro areas between July 2010 and July 2011, including Chicago, Houston and Detroit. The Chicago metro area added 12,900 jobs, increasing employment 11% over the year.

The construction industry was especially hard-hit by the recession, and advocates worry that it will continue to slump as local and state governments cut back on infrastructure improvements. Stimulus projects, which gave the industry a lifeline during the recession, have all but dried up.

"The big worry for construction workers is that private demand will again slip while governments continue to cut back on infrastructure investments," said Ken Simonson, chief economist of the Associated General Contractors of America.

Demand for homes isn't likely to pick up anytime soon. Home prices are at 2003 levels, and when adjusted for seasonality, remain essentially flat, according to the Case-Shiller index, released Tuesday. That's why construction groups like the AGC are urging governments to spend more on infrastructure in order to stimulate the economy, despite budget deficits.

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Photo: A construction worker stands on a new home in Riverside County. Credit: Alana Semuels/Los Angeles Times

Corporate profits increase as GDP remains sluggish

The nation's gross domestic product may be growing at just a crawl, but corporations aren't doing so badly in this economy, according to data released from the Bureau of Economic Analysis. Corporate profits increased in the second quarter, as did the amount of cash businesses had available for investments, as taxes decreased.

Corporate profits increased $57.3 billion in the second quarter, according to the BEA. They had grown $19 billion in the first three months of the year. But that growth didn't play out in the labor market, which experienced an unanticipated slowdown in May and June. The nation added just 316,000 jobs in the second quarter, according to data from the Bureau of Labor Statistics. That number is only slightly more than economists say we need to add per month for a real recovery.

The amount of internal funds available for investment grew $83.8 billion in the second quarter, after growing $21.1 billion in the first quarter. Tech companies were among those with growing profits in the second quarter. Last month, Google Inc. announced second-quarter net income of $2.5 billion and Apple made $7 billion over roughly the same time period, doubling its earnings from the same period a year ago.

Overall, corporate profits grew 8.3% over a year ago.

Business growth was slowed by turmoil in the financial industry, however. While overall, corporate profit rose, profits at financial institutions decreased $54.2 billion after falling $38.7 billion in the first quarter. Nonfinancial corporations saw profits grow $84.4 billion.

Still, the overall growth in profits was a piece of good news in an overall lackluster data release, according to analysts with IHS Global Insight. The corporate profits data were released with the second estimate for the gross domestic product, which the government now says grew at a rate of 1% in the second quarter, rather than the 1.4% previously projected. The widely expected revision was largely due to a decrease in exports.

Now, economists say they'll look to data in September to determine whether or not the country is headed for another recession -- which could happen whether or not corporate profits continue to increase.

"The U.S. is stuck in this low-growth rut and will be for some time to come. The outlook for employment and personal income growth, by extension, is equally poor as well -- whether the economy prints a negative GDP growth number or not," wrote Steve Blitz, Senior Economist for ITG Investment Research.

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Photo: A customer at an Apple store in April. Tech and other companies saw profits boom in the second quarter. Credit: Don Kelsen / Los Angeles Times

Nevada, Michigan face slow comeback on jobs, forecast says

Nevada and Michigan won't return to peak employment levels until 2017 or later, according to an analysis from IHS Global Insight.

The two states, hit hard by the recession, aren't the only two with far-off dates for a return to peak in employment. California, Arizona, Florida, Georgia and Ohio won't see a return to peak until 2016 or 2017, the firm predicts.

The only states that are humming along in the jobs picture are Texas, Alaska and North Dakota, according to IHS.

The research firm also released projected employment growth rates in U.S. states from 2011 to 2017. The number of jobs in California will grow at an average annual rate of 1.6%, while employment in Texas will grow at 2.1%.

Arizona and Utah are projected to have the highest employment growth rates between 2011 and 2017, at 2.3% and 2.2% a year, respectively.

Some Sun Belt states have relatively high projected rates while recovery is still a long way off, said Jim Diffley, group managing director of U.S. Regional Services at IHS. That's because those states lost many jobs in the recession, but are also seeing high population growth, so they'll show higher rates of growth from the low levels of 2010.

The North Dakota projection seems to have already come true: Halliburton announced Thursday that it was adding 11,000 jobs, many of which would be located in North Dakota.

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Gov. Jerry Brown proposes job creation plan for California

Gov. Jerry Brown wants to expand a hiring tax credit and provide tax relief to businesses that buy manufacturing equipment, while getting rid of a loophole that voters supported in elections in 2010.

Brown's California Jobs First package was announced a week after the state Employment Development Department said that hiring slowed in July to just 4,500 jobs, helping push the  unemployment rate to 12%. The state has the second-highest unemployment rate in the nation, after Nevada. Business creation in the state has also slowed to a halt, according to a study released earlier this week.

"Boosting job growth in California is a top priority, and this proposal is a critical step in making sure the state does everything it can to support local job creation," Brown said in a statement.

The first part of Brown's plan expands a tax credit for hiring new employees. He wants the credit to include small businesses with up to 50 employees and to increase the credit to $4,000, from $3,000.

The second part will make start-ups exempt from the state portion of sales tax on manufacturing equipment for their first three years in business. It also exempts 3% of other firms for those same purchases. Brown's office estimates this will provide $1 billion in tax relief to businesses.

The third part could be the most controversial. It would make a single sales factor tax mandatory on all businesses in California. Currently, multi-state businesses can choose how their sales tax is calculated. They can chose between basing their taxes on the proportion of their sales occurring in the state, or on a combination of sales, payroll and property in the state.

One of the provisions of Prop. 24 in the 2010 election would have disallowed corporations from choosing how to calculate their taxes, but Prop. 24 was not passed. 

"It's time to enact this common sense plan that puts California's economy and our jobs ahead of out-of-state tax loopholes," said Assembly Speaker John A. Perez.

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-- Alana Semuels

Photo: Gov. Jerry Brown in Sacramento. Credit: Eric Paul Zamora/The Fresno Bee

 

Homes in some markets are undervalued, report says

Home prices in 42 U.S. metropolitan areas including Las Vegas and Detroit are undervalued compared with historical average prices, according to a brief by real estate website Zillow.com. In areas such as Los Angeles, New York and San Francisco, though, prices are at a premium compared with historical averages, the website says.

Zillow uses a ratio that compares the median price of a home in metro areas with the median level of household income in that area. Historically, from 1985 to 2000, home prices were about three times the median household income. That ratio started growing during the housing bubble, until the end of 2005 in the U.S., when home prices were 5.1 times median household income.

Since then, the price-to-income ratio has fallen to 3.3% nationally. But in 42 metro areas, that ratio has dropped to lower than historical levels. In California, price-to-income ratios in Stockton and Modesto are 19% and 18% lower than they were historically. In Fresno, the ratio is 7% lower than it is historically.

On the flip side, the price-to-income ratio in 85 metro areas is higher than average. Those areas include Napa, Ventura, Los Angeles and, oddly enough, Riverside.

Zillow says that price-to-income ratios in areas such as Detroit may not return to historical levels "because of fundamental changes in local housing demand." On the other hand, in some metro areas, homes require less income than they once did, which could make them appealing to buyers.

"This, in turn, might suggest that demand for housing in these markets will increase as buyers take advantage of this value proposition," wrote Svenja Gudell. This will in turn produce "a stabilization in home values near-term, and longer term, the potential for price appreciation."

Beware Californians, a real estate site is telling you to buy now. Are we going to have a boom and bust all over again?

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Housing, industrial production data show conflicting signals

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-- Alana Semuels

Photo: A sign spinner advertises a housing development in Winchester. Credit: Alana Semuels/Los Angeles Times

 

Housing, industrial production data give conflicting signals

Economists had been waiting for a series of data releases Tuesday for an indication of where the direction the economy was headed. But so far the numbers have been mixed.

July housing starts were at a seasonally adjusted rate of 604,000, lower than June but higher than July of last year, the U.S. Census Bureau said. Permits for residential construction also declined, by 3.2%. But few had really expected housing to do well anyway.

"Today's economic data confirms that residential construction will not provide much of a boost to headline growth this year," Comerica economist Robert A. Dye wrote in a note.

On the flip side, industrial production numbers were better than expected. Industrial production grew 0.9% in July, according to the Federal Reserve. This was led by manufacturing of motor vehicles and parts, which started up production again after a lapse casued by the Japan earthquake and tsunami.

Those numbers were "a counterbalance to the drag from recent financial market volatility," Dye wrote.

For production numbers to keep growing, car sales must continue to rebound. Vehicle sales grew to 12.2 million in July, but recent hits to consumer confidence may stall this segment of the economy. The consumer confidence index plunged to 54.9 in August, according to the University of Michigan Consumer Sentiment Index, from 77.5 last February.

Chain store sales numbers from the week also indicate consumer confidence is flagging. Shoppers pulled back for the third straight week with retail sales falling 1.5% in the week ending Aug. 13. In the previous week, sales had declined 0.5%.

"Last week’s large-scale stock market drops and wild volatility added to consumers' concerns about the slowing and failing economy and as a result pulled back on their overall spending once again,” said Michael Niemira, ICSC vice president of research and chief economist.

For a schedule of economic data coming out in the next month, look after the jump.