Unemployment Rate Ticks Up, Elevated Compared To Nation

California’s labor market expanded steadily in November, with total nonfarm employment in the state growing by 26,800 positions, according to an analysis released jointly by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development. October’s gains were also revised up to 59,800 in the latest numbers, a 3,100 increase from the preliminary estimate of 56,700.

California has added jobs at a healthy pace in 2021 and 2022. As of November 2022, the state had recovered all of the jobs that were lost in March and April 2020, and there are now 60,700 more people employed in California compared to February 2020. Over this time, total nonfarm employment in the state has grown 0.3% compared to a 0.7% increase nationally. The state increased payrolls by 4.0% from November 2021 to November 2022, outpacing the 3.3% increase nationally during the same period.

California’s unemployment rate grew to 4.1% in the latest numbers, a 0.1 percentage-point increase over the previous month. While this is near historic lows, the unemployment rate remains elevated relative to the nation’s 3.7% rate. California continues to struggle with its labor supply, which fell by 21,000 in November. Since February 2020, the state’s labor force has contracted by 282,000 workers, a 1.4% decline. This lack of workers is making it difficult for some employers to hire the additional staff they typically bring on during the holiday season.

“While the state’s payrolls are now in expansion mode, many communities continue to struggle to find workers, especially in coastal areas of the state,” said Taner Osman, Research Manager at Beacon Economics and the Center for Economic Forecasting. “The lack of affordable housing along the coast is the primary constraint holding back job expansion.”

Industry Profile  

• At the industry level, the largest job gains continue to occur in the sectors hit hardest by the pandemic. While employment in nearly half of California’s sectors now exceed their pre-pandemic peaks, employment levels in the hardest hit sectors remain below pre-pandemic levels and, as such, should continue to steadily gain jobs over the coming months.
• Leisure and Hospitality led the gains in November, with payrolls expanding by 13,900. Leisure and Hospitality still has a long way to go to recover all of the jobs lost due to the pandemic, with payrolls still down 5.3% since February 2020.
• Other sectors posting strong gains during the month were Health Care (10,500), Information (6,300), Professional, Scientific, and Technical Services (3,800), Education (2,900), Other Services (2,800), Government (2,200), Real Estate (2,200), Administrative Support (1,500), and Manufacturing (1,100).
• Job losses also occurred in November with Retail Trade (-14,700) leading the declines during the month. Other sectors posting significant job losses were Transportation, Warehousing, and Utilities (-6,500) and Management (-600). With a tight labor market, Retail Trade and Transportation, Warehousing, and Utilities are finding it difficult to find the additional staff they typically hire during the holiday season.

Regional Profile

• Regionally, job gains were led by Southern California. Los Angeles (MD) saw the largest increase, with payrolls growing by 18,000 (0.4%) during the month. San Diego (5,300 or 0.3%), Orange County (900 or 0.1%), and Ventura (200 or 0.1%) also saw their payrolls jump. Since April 2020, the Inland Empire (136.8%) has experienced the strongest recovery in Southern California, followed by El Centro (113.6%), San Diego (102.1%), Orange County (97.7%), Los Angeles (MD) (96.1%), and Ventura (90.4%).
• In the Bay Area, San Francisco (MD) experienced the largest increase, with payrolls expanding by 3,000 (0.3%) positions in November. San Jose (2,000 or 0.2%), Santa Rosa (1,900 or 0.9%), the East Bay (1,100 or 0.1%), and Napa (500 or 0.7%) also saw payrolls expand during the month. Since April 2020, San Jose (104.7%) has experienced the strongest recovery in the Bay Area, followed by San Francisco (MD) (92.4%), the East Bay (91.6%), Santa Rosa (87%), Napa (78.3%), Vallejo (72%), and San Rafael (MD) (53.9%).
• In the Central Valley, Sacramento experienced the largest monthly increase as payrolls expanded by 1,600 (0.2%) positions in November. Payrolls in Bakersfield (1,000 or 0.4%), Merced (800 or 1.1%), Stockton (700 or 0.3%), Chico (400 or 0.5%), Fresno (300 or 0.1%), Hanford (200 or 0.5%), Visalia (200 or 0.1%), and Redding (100 or 0.1%) increased as well. Since April 2020, Stockton (144.3%) has experienced the strongest recovery in the Central Valley, followed by Visalia (130.7%), Merced (122%), Redding (116.5%), Madera (116%), Sacramento (114.9%), Fresno (108.3%), Hanford (106.9%), and Yuba (106%).
• On California’s Central Coast, Santa Barbara added the largest number of jobs, with payrolls increasing by 700 (0.4%) during the month. San Luis Obispo (400 or 0.3%), Salinas (300 or 0.2%), and Santa Cruz (300 or 0.3%) all saw payrolls decline during the month. Since April 2020, Santa Barbara (102.1%) has experienced the strongest recovery along the Central Coast, followed by San Luis Obispo (92.7%), Santa Cruz (88.4%), and Salinas (80.8%).