California’s high-paying industries created far fewer jobs than previously thought, as a sharp downward revision cut the number of positions in professional services, finance and information by about 250,000 compared with initial reports.
The state added only 50,000 jobs overall in the 12 months through September 2023, a stark contrast to the 300,000 jobs originally thought to have been created, the state’s Legislative Analyst’s Office said in a report, citing data from the Bureau of Labor Statistics.
The professional services sector, which includes high-paying industries such as law, accounting and engineering, saw the largest downward revision, followed by the tourism, trade and transportation sectors. Job growth in health care and government sectors was underestimated.
The change could have implications because the legislature and Governor Gavin Newsom’s administration use the data to gauge the health of the economy, which is considered the fifth-largest in the world. It comes amid a projection by the LAO that California’s budget deficit could reach $73 billion next year, an increase from Newsom’s earlier estimate of a $58 billion shortfall in 2024-25.
Overall, the pace of job growth in California was lowered to just 0.3% for the 12-month period, down from 1.7% before the revisions.
In contrast to the business surveys, the monthly household survey, which interviews a smaller sample of households about employment, has consistently provided a more accurate reflection of the state’s job growth, closely mirroring the revised figures, according to the LAO.
Written by: Alexandre Tanzi and Sarah McGregor @Bloomberg
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