Santa Barbara County’s average unemployment rate dropped to 7.4 percent in May as the county added 3,700 more jobs, according to the California Employment Development Department.
The unemployment rate is down 0.3 percentage points from 7.7 percent in April. A year ago the rate was 8.4 percent.
Santa Barbara County fares better than California’s 8.2 percent rate, which is up 0.1 percent, the first increase in almost a year. Workforce Investment Board Executive Director Raymond McDonald said he was surprised when he saw May’s numbers because Santa Barbara County already has one the lowest unemployment rates in the state — the third lowest out of 57 counties.
“The positive employment report from the state should continue to build confidence in the workforce system throughout the county,” he said. “We are continuing to see communities that work together implementing workforce development and economic vitality programs starting to see consistent improvement.”
From April to May, the leisure and hospitality sector, agriculture and the business and professional services added the most jobs. The sectors added 1,200, 1,100 and 800 jobs, respectively. Growth in professional and business services is a good sign because it’s usually a precursor to permanent hires, McDonald said.
But one of the most encouraging signs stems from the North County’s labor force, he said.
In the past three months, Lompoc reported a 2.4 percentage point drop in unemployment, from 15.5 to 13.1 percent; Guadalupe dropped from 15.1 to 12.7 percent; and Santa Maria decreased from 13.8 to 11.6 percent. Comparatively, Santa Barbara’s unemployment rate dipped 1.5 percent over the past three months from 8.9 to 7.4 percent.
“South County is consistently influenced by tourists,” said McDonald, adding that the region also doesn’t have as many people. “Therefore, North County is often more indicative of the general health of the county.”
While Karen Dwyer of Employment Express Professionals said she has seen a significant uptick in her business, the challenge is getting people into better-paying jobs.
“As the demand for jobs increases, employers pay more to be more competitive,” Dwyer said. “That’s happening at the entry-level jobs, which is a good sign.”
While employers nationwide added only 69,000 jobs — the fewest in 12 months — California had the most growth of any state, gaining nearly 34,000 jobs.
Although job growth remains sluggish, several economic indicators improved in May.
The Conference Board’s Employment Trends Index combines eight indicators: job searchers who say jobs are “hard to get,” unemployment insurance claims, percentage of firms with positions they can’t fill, employees hired by the temp industry, part-time workers, job openings, industrial production, and real manufacturing and trade sales.
The ETI increased 0.29 percent in May, from 108.03 to 108.34, up 7.6 percent from a year ago.
The indicators that improved the most were the percentage of firms that can’t fill positions, unemployment insurance claims and temp industry growth, according to Gad Levanon, director of macroeconomic research at The Conference Board.
“While growth in employment has slowed significantly in recent months, the Employment Trends Index does not signal further slowing in the coming months,” he said. “Employers have been very cautious in hiring in the past two months, but at the moment, economic activity in the U.S. is just strong enough to require a modestly growing workforce.”
Ultimately, it comes down to training job seekers for the skills needed in growing industries, McDonald said.
“We need to make the connection between the new growth industries and our workers by telling them this is where the future jobs are and how they can build on existing skills,” he said.