Not a total disaster, but certainly not good - as we noted earlier, the state lost 29,200 payroll jobs in May, which compares with a gain in 14,900 jobs in April. L.A. County lost 11,400 jobs in May. The state's unemployment rate was 11.7 percent, second-highest in the country, although it was down from 11.9 percent in April. L.A. had a jobless rate of 11.9 percent, down a touch from 12 percent in April. So what's the takeaway from all these numbers?
--Is this normal? In a word, no. Losing jobs is not exactly what you want to see at this stage of the recovery, but then again the disappointing report reflects a generally sluggish situation nationally. Also keep in mind that economies don't improve in a straight upward line. It's possible we've just entered a lull (seriously).
--Why the drop in jobs? Most of L.A.'s losses fell into the amorphous category of professional and business services, which covers a host of industries and sectors. So there's no one event or circumstance that seems to be driving the losses.
--What industries were hiring? Construction, surprisingly - 1,200 jobs were added in L.A. last month. Also, leisure and hospitality, which is what you would expect at this time of year.
--What about the Japanese earthquake? That's being used as a catch-all explanation for the national slowdown in May and June - and perhaps there's something to it (supply chains have been badly disrupted for car companies and electronics). Higher fuel costs might also have played a role. Very hard to know.
--How come the unemployment rate fell while jobs were lost? Because the numbers are derived from two separate surveys that are prepared in different ways. A lower jobless rate sounds good, but it could just reflect fewer people actively looking for work. Besides, 11.9 percent is way too high, no matter how you explain it.
--How does this report match the recent batch of economic forecasts? UCLA and Chapman expect only modest job gains in 2011, picking up in 2012 and 2013. The May report, while disappointing, probably won't change those longer-term readings.
--How does all this relate to the housing slowdown? A lot. This is from UCLA's Anderson Forecast, just out this week:
The basic story of today's housing markets is that of a market that completely imploded, that has many Californians underwater and a market with demand diminished by both a lack of easy financing and a lack of jobs. It is still the case that there is pent up demand and that California is underbuilding, but the manifestation of that pent up demand is going to require more job gain that has occurred thus far in the recovery. Specifically, we are looking for another year before we see significant increases in the demand for housing.
--So what happens now? Wait for the next batch of data to see whether May was an aberration or sign of a serious setback in the jobs recovery.