Fresno County’s seven-years streak of employment gains ends. What happened?

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.

After seven years of year-over-year improvement in the monthly unemployment rate, Fresno County’s jobless rate ticked up in January compared to a year ago.

Figures released Friday by the state Employment Development Department estimated the county’s unemployment rate at 8.9 percent.

That’s not only up from the December rate of 7.4 percent, but it’s also higher than the 8.7 percent reported for January 2018. Prior to that, the monthly unemployment rate in the county had fallen from the year-prior figure for 87 consecutive months, since October 2011.

The number of people with jobs in Fresno County in January was higher than a year earlier – about 417,200 workers compared to just under 402,000 in January 2018. But the number of unemployed also was higher, which mathematically drove the unemployment rate up.

Steven Gutierrez, a labor market specialist in Fresno with the EDD, said higher unemployment in January is part of a seasonal trend in this region. “The first quarter is when we typically have our highest unemployment rates of the year,” he said. “There’s less construction activity because of the weather, there’s less work in agriculture, and retailers are cutting back on their seasonal staff after the holidays.”

The Fresno County figures did show some industry sectors with significant year-over-year gains in employment, most notably in trade/transportation/utilities with an overall increase of 3,200 jobs.

About 2,300 of those positions are in the subsector of transportation and warehousing – potentially reflecting the opening last year of major new distribution warehouses by online retail giant Amazon and beauty products retailer Ulta Beauty in south Fresno and an expansion of Gap Inc.’s distribution warehouse in central Fresno.

Transportation and warehousing businesses in the county employed an estimated 13,100 people in January, compared to 10,800 a year earlier.

California’s unemployment rate was estimated at 4.2 percent in January, down from 4.4 percent a year earlier. The U.S. jobless rate of 4.4 percent was down from 4.5 percent in January 2018.

But job growth statewide and nationally was lower than some analysts had anticipated, fueling concern over the potential for a slowing economy after nine years of slow and at times unsteady recovery from the recession of 2007-09.

Robert Dye, chief economist for Comerica Bank, characterized preliminary estimates of national job growth in February as “the clunk heard around the world,” as the U.S. added only about 20,000 jobs during the month, compared to expectations of about 200,000 new jobs nationwide.

“Payroll job growth in February was much weaker than expected,” Dye wrote in his analysis. “The February clunker comes as other risk factors for the U.S. economy appear to be increasing.” He pointed to expectations of slower economic growth in China and Europe, both major trading partners for the U.S.

Michael Bernick, an employment attorney and former director of the state EDD, noted that California only gained 3,000 non-farm jobs in January compared to December, “well below the monthly average of around 24,000 jobs we’ve seen in the past few years.”

“It’s too early to say whether this represents the employment slowdown or even downturn that has been talked about for some time,” Bernick added.

“This is the second longest employment expansion in the post-World War II period in California. … We will know more in the next two months whether this is a one-month exception, or a longer term trend.”

The next set of unemployment numbers for California and its counties for February is due out in a couple of weeks.

In his most recent economic forecast for northern California, economist Jeffrey Michael at the University of the Pacific’s Center for Business and Policy Research last month reported that “there is growing evidence that California’s long-run growth rate will be slower as population growth rates have declined significantly in the face of a housing shortage and growing cost-of-living challenges.”

“There is increased anxiety about the economic outlook as evidenced by declining consumer and business confidence, volatile financial markets, and political discord punctuated by the recent federal government shutdown,” Michael said. “More recently, there have been concerns that weakness in the housing market could be a sign of a broader economic downturn.”

Fresno and the Valley, he added, are expected to grow at a slightly slower pace this year than in 2018. “Although a wet winter bodes well for Valley water supplies, the region’s agricultural economy is not expected to experience significant revenue growth as most commodity prices are weak and global trade uncertainty increases risk,” Michael 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.