Unemployment rates in Fresno, Valley dip to historic lows for 2018

Amazon unveils its massive Fresno fulfillment center

Amazon officials gave a sneak peek tour of its new 855,000- square-foot innovative, customer fulfillment center, prior to its mid-2018 opening in Fresno. It features conveyor lines and robots that ferry merchandise to workers for processing.
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Amazon officials gave a sneak peek tour of its new 855,000- square-foot innovative, customer fulfillment center, prior to its mid-2018 opening in Fresno. It features conveyor lines and robots that ferry merchandise to workers for processing.

Fresno’s average yearly unemployment rate for 2018 reached its lowest point in at least 28 years, and rates across its neighboring central San Joaquin Valley counties dipped to new post-recession lows not seen for a decade or more.

The December unemployment rate in Fresno County was estimated at 7.5 percent in Fresno County. That was up from 6.9 percent in November, but lower than the 8.1 percent rate reported by the state Employment Development Department for December 2017. This was the 87th consecutive month – more than seven years – of year-over-year improvement in the monthly unemployment rate.

Figures released by the EDD on Friday indicate that for the entire year, Fresno County’s average unemployment rate was 7.4 percent – the lowest rate reported by the state in figures dating to 1990, when the state agency undertook its current reporting methods.

“A rate of 7.4 percent is excellent historically for Fresno,” said economist Jeffrey Michael, director of the Center for Business and Policy Research at the University of the Pacific in Stockton. “We’ve had a prolonged period of economic growth, really strong job growth. And in Fresno, we’re seeing some change in the economy as the city continues to grow and have more urban and service-oriented jobs, which takes a little edge off of the seasonality” of agriculture-related jobs.

Over the course of the year, Fresno County saw the greatest job growth in government jobs. State, federal and local agencies added about 2,300 positions. Among private-sector employers, the most significant gains were reported in the leisure/hospitality industry, which added about 1,700 jobs between December 2017 and December 2018. The county’s construction industry also saw about 1,500 more jobs in December than a year earlier.

Farm employment in December was down about 400 positions from the year before.

In neighboring Kings and Merced counties, the yearly rates also fell to their lowest points since 1990. Madera County’s annual rate of 7.0 percent represented the first time the rate had been at that level since 2006, while Tulare County’s rate of 9.4 percent was the lowest since 2007, when it was at 9.2 percent.

In Fresno and across the Valley, “the labor force and population are growing, but at a much more modest pace,” Michael told The Bee. “But employment has been growing rapidly.”

Steven Gutierrez, an EDD labor market consultant for the Fresno area, noted that 2018 was the first year since 2006 in which every month had an unemployment rate in single digits based on the highest numbers of people employed in the county’s history. “In September 2018, we had the highest employment at 428,600, and the average for the whole year was 419,900, which was also the highest we’ve ever seen going back to 1990,” Gutierrez said.

“It’s always a good sign for Fresno County to be under 10 percent for the year,” Gutierrez added. “That’s only happened six times since 1990.”

Still lagging state, national rates

While the year-over-year and yearly average unemployment rates showed improvement for Fresno County and the Valley, the region continues its historic pattern of lagging behind both statewide and national unemployment rates. California’s December unemployment rate was 4.1 percent, and the overall average for the full year was 4.8 percent. Nationally, the U.S. unemployment rate was 3.7 percent in December

Employment analyst Michael Bernick, a San Francisco attorney and Milken Institute fellow who served as director of the state employment department from 1999 to 2004, acknowledged the gap that has historically existed between unemployment rates in the Valley and the statewide average.

“But the strong economy has brought down unemployment through the state,” Bernick told The Bee. “That’s why the Valley and other areas of the state that have always seemed to have double-digit unemployment are where they are at now.”

“Yes, there remains a gap between coastal counties and the Central Valley,” he added, “but even those areas have gone down dramatically” in unemployment rates.

Bernick and Michael both said they believe that employment growth will continue through 2019, albeit at a slower pace than the past couple of years.

“There’s no reason the strong employment market can’t continue, but it is likely to slow and has already started slowing a little,” Bernick said. “There’s a caveat, though, in that we don’t know the impact of external events. I would have said tariffs, but we may be getting closer to an agreement with China.”

Michael, the UOP economist, said his center is forecasting that unemployment in the Fresno area will likely bottom out at 6.9 or 7 percent for 2019 as employment growth slows.

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“There is increasing uncertainty in the economic outlook, particularly related to the global economy,” Michael said. “The international outlook is seeing slowdowns in China and other export markets even independent of tariffs.” Trade tariffs between the Chinese government and the Trump administration, on top of the already uncertain outlook, “could have some additional effect on export markets and create uncertainty for businesses.”

“From agriculture to construction, folks who are thinking about prices of components and bidding jobs now that won’t be done for a year or two, they are concerned about potential surprises” from price spikes resulting from tariffs, Michael added.

Gutierrez noted the opening of major distribution centers by Amazon and Ulta Beauty in Fresno last year. “If Fresno can continue to bring that diversity of industries, we will continue to have positive job growth in the coming years,” he said.

Lifelong Valley resident Tim Sheehan has worked in the Valley as a reporter and editor since 1986, and has been at The Fresno Bee since 1998. He is currently The Bee’s data reporter and covers California’s high-speed rail project and other transportation issues. He grew up in Madera, has a journalism degree from Fresno State and a master’s degree in leadership studies from Fresno Pacific University.