Friday, November 26, 2021
Career & WorkplaceEconomy

California Continues to Account for Outsized Share of U.S. Job Growth but Unemployment Rate Remains ‘Stubbornly’ High

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Hard Hit Sectors Still Have A Way To Go To Recover Pandemic-Driven Losses 

California’s labor market expanded at a solid pace in October, with total nonfarm employment in the state growing by 96,800 positions, according to an analysis released jointly by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development. This growth accounted for 18.2% of the nation’s overall job gains in October. Note that September’s gains were revised up to 55,300 in the latest numbers, a 7,900 increase from the preliminary estimate of 47,400.

While California added jobs at a healthy rate throughout 2021, as of October, there were still 886,300 fewer people employed in the state than at the pandemic’s onset in February 2020. Overall, total nonfarm employment has contracted 5.0% in the state compared to a 2.8% drop nationally. As a result, with a larger portion of its workforce still to be recovered, California should continue to see more rapid growth relative to the nation in the coming months.

California’s unemployment rate fell to 7.3% in October, a 0.2 percentage-point decline from the previous month, which was driven by an increase in household employment (+32,700) and a decrease in the labor force (-8,400). California’s unemployment rate remains elevated relative to the nation’s 4.6% rate. The supply of labor in the state is still far below pre-pandemic levels. Since February 2020, the state’s labor force has fallen by 410,600 workers, a 2.1% decline.

“We’re close to two years since the world was broadsided by the pandemic and California’s unemployment rate remains stubbornly high,” said Taner Osman, Research Manager at Beacon Economics and the UCR Center for Forecasting. “Unfortunately, there are no quick fixes here and we expect unemployment to stay elevated well into 2022.” 

Industry Profile

  • At the industry level, the largest jobs gains continue to occur in sectors hit hardest by the pandemic. While California has made up significant ground in recent months, employment in many of these sectors remain far below their pre-pandemic levels and should continue to steadily recover over the coming months.
  • Administrative Support led payrolls gains in October, expanding by 29,800 positions. Leisure and Hospitality also enjoyed a strong month, with payrolls growing by 21,500. Still, Leisure and Hospitality has a long way to go to recover all of the jobs lost due to the economic downturn, with payrolls having fallen by 347,300 (-16.9%) since its previous peak in February 2020.
  • Other sectors posting strong gains during the month were Professional, Scientific, and Technical Services (9,900), Retail Trade (8,600), Construction (7,500), Transportation, Warehousing, and Utilities (3,700), Finance & Insurance (3,300), and Health Care (3,000).
  • Job gains were broad based in October with Government (-4,000) and Management (-200) being the only sectors to post loses during the month.

Regional Profile

  • Regionally, job gains were led by Southern California. Los Angeles (MD) saw the largest increase, where payrolls grew by 15,400 (0.4%) during the month. San Diego (11,500 or 0.8%), Orange County (10,200 or 0.6%), the Inland Empire (8,900 or 0.6%), and El Centro (500 or 1.0%) also saw their payrolls jump. The Inland Empire (83.5%) has experienced the strongest recovery in the region, measured by the percentage of jobs recovered from April 2020 to September 2021 relative to the jobs lost from February 2020 to April 2020. The IE is followed by Orange County (69.3%), Ventura (65.6%), San Diego (64.8%), El Centro (63.3%), and Los Angeles (MD) (55.8%).
  • In the Bay Area, San Francisco (MD) experienced the largest increase, with payrolls expanding by 8,700 (0.8%) positions in October. San Jose (8,100 or 0.7%), the East Bay (2,300 or 0.7%), Santa Rosa (1,700 or 0.9%), Napa (400 or 0.6%), and San Rafael (MD) (100 or 0.1%) also saw payrolls expand during the month. Since April 2020, San Rafael (MD) (71.3%) has experienced the strongest recovery in the region, followed by Napa (66.9%), San Jose (66.0%), Santa Rosa (59.6%), Vallejo (54.9%), San Francisco (MD) (53.4%), and the East Bay (51.9%).
  • In the Central Valley, Sacramento experienced the largest monthly increase, as payrolls expanded by 5,300 (0.5%) positions in October. Payrolls in Visalia (1,400 or 1.1%), Fresno (1,300 or 0.4%), Bakersfield (1,000 or 0.4%), Hanford (500 or 1.3%), Madera (200 or 0.5%), Redding (200 or 0.3%), and Merced (100 or 0.1%) increased steadily as well. Since April 2020, Stockton (90.54%) has experienced the strongest recovery in the region, followed by Redding (88.3%), Sacramento (74.6%), Merced (72.7%), Modesto (70.9%), and Fresno (70.2%).
  • On California’s Central Coast, Salinas added the largest number of jobs, with payrolls increasing by 1,800 (1.3%) during the month. San Luis Obispo (500 or 0.5%) also saw payrolls expand during the month. Since April 2020, Salinas (75.4%) has experienced the strongest recovery in the region, followed by Santa Barbara (67.8%), San Luis Obispo (51.6%), and Santa Cruz (47.3%). 

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Inland Empire Business Journal
The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.