California jobless rate increases to 8.9 percent

SACRAMENTO, Calif. (KABC) -- California's jobless rate has gone up for the second month in a row in August to 8.9 percent, even as the state added more than 29,000 jobs.

That's up nearly a half-percent since June and two-tenths of a percent over July. When California's unemployment rate rose in July, it was the first increase since spring 2011.

The state has seen 26 consecutive months of job growth since the recession ended, the longest streak of any state, including the 29,100 jobs added in August.

It's not clear why the state is experiencing the contradictory trend of a rising unemployment rate coupled with greater job creation.

One possible explanation is that the long-term unemployed may have started looking for work again. Or it could be that more jobs were lost than created over the summer.

Stephen Levy, senior economist for the Center for Continuing Study of the California Economy, said the unemployment rate is based on a smaller and more volatile survey, and it was likely affected by seasonal employment. He said that job creation is the more accurate figure.

"It's another month of this slow path to a full recovery, painfully slow," he said.

According to the statistics, California added jobs at a slightly faster pace than the nation; coastal areas and higher-paying jobs are recovering more quickly; and two sectors that had been a drag on the economy, construction and government, are slowly beginning to recover.

Christopher Thornberg, founding partner of Beacon Economics, said a two-month rate increase is too soon to worry. He said the last two months showed unemployment dropping "at almost an unbelievable rate," and he thinks the longer-term statistics will show steady improvement for the state's economy.

California's jobless rate had been in double digits and was among the highest in the country during the recession. It fell to 8.6 percent in May, which was the first time it had been below 9 percent in five years.

It has been edging back up since then and remains above the national average of 7.3 percent. The Employment Development Department says more than 1.6 million Californians remain out of work, up 23,000 over July.

Nevada, at 9.5 percent, has the highest unemployment rate of any state, followed by Illinois, Rhode Island and Michigan.

The Associated Press contributed to this report.

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