Unemployment Rate Holds Steady As State Labor Force Increases
California’s labor market continued to expand at a rapid pace in April, with total nonfarm employment in the state growing by 101,800 positions over the month, according to an analysis released jointly by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development.
April’s numbers came in below expectations at the national level, however, California accounted for 38% of the 266,000 net jobs added in the nation during the month. In addition to California’s strong monthly gains in April, March’s gains were revised up to 132,400 in the latest numbers, a 12,800 increase over the preliminary estimate of 119,600.
Over the past three months, the state’s economy has added close to 400,000 jobs, representing the fastest hiring surge since summer 2020. These gains are welcome since, in April 2021, there were still 1.41 million fewer people employed in California than in February 2020. Total nonfarm employment in the state has contracted 8.0% since that time. This compares unfavorably to the national picture, where the labor market shrunk by 5.4% over the same period. However, the rate of job growth in California in 2021 has outpaced the national economy.
“Having seen sharper job losses compared to the nation in 2020, California’s outperformance in 2021 was expected,” said Taner Osman, Research Manager at Beacon Economics and the UCR Center for Forecasting. “With the state on course to reopen soon, and with the continued rollout of vaccines, the recent surge in hiring should continue over the summer.”
California’s unemployment rate held steady at 9.0% in April, unchanged from the previous month, as the state’s labor force expanded by 33,600. California’s unemployment rate remains elevated relative to the 6.1% rate in the United States overall. Since February 2020, the state’s labor force has decreased by 478,800 workers, a 2.5% decline.
- At the industry level, the largest jobs gains continue to occur in sectors hardest hit by the pandemic. While California has made up significant ground in recent months, employment levels in many of these sectors remain far below their pre-pandemic levels.
- Leisure and Hospitality led gains in April, with payrolls expanding by 62,800. Still, the sector has a long way to go to recover all of the jobs lost due to the economic downturn, with payrolls having fallen by 577,400 (-28.1%) since its previous peak in February 2020.
- Other sectors posting strong gains during the month were Professional, Scientific, and Technical Services (15,600), Other Services (10,500), Health Care (10,300), Administrative Support (4,200), and Wholesale Trade (2,800).
- A handful of sectors saw their payrolls decline in April. These include Information (-3,500), Transportation, Warehousing, and Utilities (-1,300), Real Estate. (-1,200), Management (-800), and Construction (-600).
- Regionally, job gains were led by Southern California. Los Angeles (MD) saw the largest increase, where payrolls grew by 20,800 during the month. Orange County (12,300), the Inland Empire (5,800), and San Diego (5,200) also saw their payrolls jump during the month. Since the pre-pandemic peak in February 2020, Los Angeles (MD) (-10.8%) has experienced the steepest job losses in the region, measured by percentage decrease, followed by Orange County (-8.7%), Ventura (-8.2%), San Diego (-8.1%), El Centro (-7.0%), and the Inland Empire (-4.6%).
- In the San Francisco Bay Area, San Francisco (MD) experienced the largest increase, with payrolls expanding by 9,800 positions in April. San Jose (4,900), the East Bay (800), San Rafael (MD) (700), and Santa Rosa (700) also saw payrolls expand during the month. Since the pre-pandemic peak in February 2020, Napa (-11.1%) has had the steepest declines in the San Francisco Bay Area, followed by San Francisco (MD) (-11.0%), Santa Rosa (-10.5%), the East Bay (-8.9%), Vallejo (-8.0%), San Rafael (MD) (-8.0%), and San Jose (-7.4%).
- In the Central Valley, Sacramento experienced the largest monthly increase as payrolls expanded by 4,600 positions in April. Payrolls in Modesto (600), Fresno (400), Yuba (400), and Merced (300) increased steadily as well. Since the pre-pandemic peak in February 2020, Chico (-8.8%) has had the steepest declines, followed by Yuba (-8.5%), Bakersfield (-7.9%), Visalia (-7.1%), Hanford (-7.0%), Fresno (-6.2%), and Sacramento (-5.3%).
- On California’s Central Coast, Santa Barbara added the largest number of jobs, with payrolls increasing by 1,600 during the month. Santa Cruz (-200) and San Luis Obispo (-200) saw payrolls decline during the month, while payrolls remained unchanged in Salinas. Since the pre-pandemic peak in February 2020, Santa Cruz (-12.9%) shed positions at the fastest rate, followed by San Luis Obispo (-12.3%), Salinas (-9.3%), and Santa Barbara (-7.7%).