Biggest U.S. States Report Employment Gains as Economy Recovers

California, Texas, Florida and New York, the four biggest states, all added jobs last month for the first time since May as the U.S. economic recovery stoked demand for labor.

California, the largest state, said yesterday that non-farm jobs rose by 39,000, the most since May 2006; Texas, the second- biggest, added 47,900 and Florida, with the fourth-largest population, gained 6,900. New York, the third-biggest state, said Nov. 18 it added 40,500 private-sector jobs, the most since April 2005.

The gains could help states shrink budget deficits that the Center on Budget and Policy Priorities says will likely total $140 billion in fiscal 2012, as new jobholders boost income- and sales-tax collections. States’ tax revenue grew about 6 percent in the three months that ended Sept. 30, the third consecutive increase, Goldman Sachs Group Inc. said.

“The outlook for the state and local sector has improved over the last several months, as revenues have picked up or at least stabilized in most states,” Goldman’s Alec Phillips said in a note to clients yesterday.

National employment rose in October for the first time in five months, the Labor Department said Nov. 5. Payrolls climbed 151,000, exceeding all estimates in a Bloomberg News survey of economists.

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Dimitri Proctor, of the Workforce Solutions Greater Dallas employment center, left, works with Russell Week in Irving, Texas. Close

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Photographer: Matt Nager/Bloomberg

Dimitri Proctor, of the Workforce Solutions Greater Dallas employment center, left, works with Russell Week in Irving, Texas.

Gross domestic product expanded 2 percent in the third quarter, topping the 1.7 percent growth of the second period. Economists surveyed by Bloomberg News predict 2.4 percent expansion for the fourth quarter.

National Pick-Up

“It is mildly encouraging that we are seeing some kinds of labor-market improvements in certain parts of the country,” said Paul Dales, U.S. economist for Capital Economics Ltd. in Toronto. “We have seen that kind of pick-up in the national economy as well.”

The U.S. jobless rate was unchanged at 9.6 percent in October even with the expansion of payrolls. That was the case for the four biggest states: California’s held at 12.4 percent, Texas’s at 8.1 percent, Florida’s at 11.9 percent and New York’s at 8.3 percent.

That may indicate that improving economic conditions prompted more people to look for jobs, said Julia Thornton Snider, an economist at the Anderson School of Management at the University of California Los Angeles.

“It might mean young people are looking for their first jobs or people who had been discouraged are now hearing things are getting better and they are starting to look again,” she said in a telephone interview.

Reversal of Declines

The October job gains in New York, California and Florida came after declines in September, a month when Texas gained 3,700 jobs.

The jobless rate in California, with the world’s eighth- largest economy, has been 12 percent or more for the past 15 months, according to data compiled by Bloomberg.

The state, home to Silicon Valley computer makers Apple Inc. and Hewlett-Packard Co., had the nation’s third-highest unemployment rate in September, trailing only Nevada’s 14.4 percent, and Michigan, at 13 percent, according to U.S. Labor Department figures.

“October’s gain of 39,000 jobs marks the first solid month of recovery,” said Stephen Levy, director and senior economist at the Center for Continuing Study of the California Economy in Palo Alto. “If these gains are confirmed in the following months, California will have finally turned the corner.”

Texas Low for the Year

Texas gained 172,800 non-farm jobs in the last year, the state’s labor department said yesterday. The 8.1 percent October unemployment rate was the lowest of 2010, it said.

“Every major industry added jobs in October, with notable increases in construction employment,” Texas Workforce Commission Chairman Tom Pauken said in a news release.

Florida added 35,700 jobs in the last 12 months, the state said, the largest year-over-year growth since May 2007.

“We continue to see positive signs of stabilization and growth,” Cynthia R. Lorenzo, director of the Agency for Workforce Innovation, said in a statement. “Florida posted the largest decrease in the country last week in the number of people who filed for first-time unemployment benefits.”

New York state said Nov. 18 that its largest job gains over the past year were in professional and business services, with an increase of 31,700 positions, and educational and health services with 25,300.

City Gains

The gains were helped by an increase in private employment in New York City, the nation’s most-populous, which added 41,900 jobs in October, more than twice the 10-year average monthly gain. Jobs in professional and business services, such as legal, accounting and advertising, increased by 14,600.

“An important aspect of these jobs is that they tend to be well paying,” Kevin Jack, an economist at the state’s labor department, said in an interview.

States won’t return to full fiscal health anytime soon at the current rate of employment growth, said Nicholas Johnson, director of the State Fiscal Project at the Center on Budget and Policy Priorities in Washington.

“It’s great that it’s growing, but it’s growing slowly,” Johnson said. “We need rapid jobs growth to make up for all the lost jobs and the lost time.”

To contact the reporters on this story: Simone Baribeau in Miami at sbaribeau@bloomberg.net. Alison Vekshin in San Francisco at avekshin@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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