California job growth slows in August, employers add 12,000 jobs

California's jobs engine slowed in August, with state payrolls growing by a meager 12,000 jobs, the 13th straight month of net job gains.

The jobless rate dipped slightly to 10.6% in August, down from 10.7% the month before, according to data from the state's Employment Development Department.

At the start of the summer, the state was adding jobs at a brisk pace, much faster than the nation as a whole. But with July's gains revised downward to 17,900 and August's tepid growth, economists said the slowing U.S. and global economy are beginning to affect California.

"Employers are worried about the slowdown in Asia and Europe," said Esmael Adibi, director of Chapman University's A. Gary Anderson Center for Economic Research. "They're taking a wait-and-see attitude" before hiring, he said. 

Employers across several industries added jobs, with education and health services posting the largest over-the-month increase with 8,900 jobs. The beleaguered construction industry, buoyed by growth in multi-unit housing projects, posted a gain of 5,100 jobs. The leisure and hospitality industry added 4,400 jobs.

Those gains, were offset by losses in other industries such as professional and business services, which lost 2,300 jobs. The steepest job losses, however, were in government, which shed 7,400 jobs last month, primarily in education as schools were on summer break. 

"California continues to post sustained job growth, faster than the nation, but slower than we hoped for," said Stephen Levy, director of the Center for the Continuing Study of the California Economy in Palo Alto.

Last month, U.S. employers added just 96,000 jobs as the recovery nationally languishes as concerns over the European debt crisis and the economic slowdown in China. Additionally, employers are nervous over the looming "fiscal cliff" at the end of the year, when several tax cuts will expire and automatic spending cuts kick in if Congress does not act. 

"We're doing better than the nation because tech, trade and tourism are reviving our economy, but we are linked to the trends that affect the nation," Levy said. 

Over the year, California payrolls have grown by almost 299,000 jobs, a growth rate of 2.1% compared with the nation's 1.4%. The unemployment rate has fallen 1.2 percentage points since last August, according to the state employment agency.

California has the third-highest unemployment rate, behind Nevada, which saw its jobless rate rise to 12.1% in August, and Rhode Island at 10.7%.

The report also showed that the state's labor force shrunk by about 70,000 in August as some job seekers stopped actively looking for work.

In Los Angeles, employers shed 10,400 jobs, primarily in government. The county's seasonally adjusted unemployment rate in August fell to 11% from a revised 11.2% the month before.

Next door, Orange County, lost 5,200 jobs, primarily in education and its unemployment rate was 7.7%. And the Inland Empire, which includes Riverside and San Bernardino counties, gained 10,800 jobs; its unemployment rate is 12.3%, down from 12.7% the month before. 

LA Times