Monday, April 19, 2021
Career & WorkplaceEconomy

California Job Growth Enjoys Fastest Pace in Months; Significant Labor Force Expansion

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Also a Bright Spot but Resurgence in Covid-19 Cases Will Slow Momentum

CA Unemployment Rate Declines Again; Remains Higher Than Nation As A Whole

California’s labor market recovery regained some momentum in October, with the level of employment growing at its fastest pace since June, according to an analysis released jointly by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development. Total nonfarm employment in the state expanded by 145,500 positions over the month.

The robust job gains were coupled with a significant drop in the state’s unemployment rate, which declined to 9.3% in October, down from 11.1% in the previous month. That said, the state’s unemployment rate remains elevated relative to the nation as a whole, which has a rate of 6.9%. While the state’s falling unemployment rate in recent months has been aided by a contracting labor force, in October, California’s labor force expanded significantly, growing by an impressive 609,100. The state’s labor force is still 238,300 lower than pre-pandemic levels, but a long way from the lows of May.

“The expansion of the state’s labor force is one of the brightest spots we have seen in the labor market for many months,” said Taner Osman, Research Manager at Beacon Economics and the UCR Center for Forecasting. “Unfortunately, it comes just as Covid-19 cases are again surging in California and restrictions on activity have been put in place.  Beyond the public health effects, the new surge is terrible timing for the 1.5 million workers who have been out of a job since February.”

Despite the solid performance, only 44% of the jobs lost in California during the pandemic have been recovered, with 1.5 million fewer workers employed compared to February 2020. Total nonfarm employment in the state has contracted by 8.4% since February. This pace of growth trails the nation overall, where the labor market has shrunk by 6.6% over the same period. The new statewide restrictions on business activity and consumer behavior that were announced this week, will act as a speed bump to the momentum gained this month, according to the analysis.

Industry Profile

The biggest job gains in California occurred in some of the hardest hit sectors, although employment levels in these sectors are far below their pre-pandemic levels. 

  • At the industry level, growth was led by Leisure and Hospitality, where payrolls increased by 66,000 in October. Still, the sector still has a long way to go to recover all of the jobs lost due to the economic downturn, with payrolls having fallen by 529,600 (-25.8%) over the last year.
  • Other sectors posting strong gains during the month were Construction (26,300), Professional, Scientific & Technical Services (23,000), Health Care (21,100), Retail Trade (18,100), Administrative Support (14,500), and Other Services (13,700).
  • A handful of sectors saw their payrolls decline in October. These included Government (-41,100), Education (-13,300), and Management (-1,700).

Regional Profile

  • Regional job gains were led by Southern California. Los Angeles (MD) saw the largest increase, where payrolls grew by 49,600 during the month. Orange County (24,800), San Diego (13,200), the Inland Empire (10,500), and Ventura (100) also saw their payrolls increase during the month. Over the past year, Orange County (-8.3%) has experienced the steepest job losses in the region, measured by percentage decrease, followed by Los Angeles (MD) (-8.1%), Ventura (-7.9%), the Inland Empire (-7.1%), and San Diego (-6.9%).
  • In the San Francisco Bay Area, San Jose experienced the largest increase, with payrolls expanding by 12,600 positions in October. San Francisco (MD) (9,300), the East Bay (7,400), and Santa Rosa (2,300) also saw payrolls expand during the month. On a year-over-year basis, the East Bay (-10.5%) has seen the steepest declines in the San Francisco Bay Area, followed by Napa (-10.2%), Vallejo (-9.5%), San Francisco (MD) (-9.5%), San Rafael (MD) (-9.3%), Santa Rosa (-8.9%), and San Jose (-6.0%).
  • In the Central Valley, Sacramento experienced the largest monthly increase as payrolls expanded by 6,200 positions in October. Payrolls in Modesto (2,700), Bakersfield (2,500), Stockton (2,000), and Fresno (1,000) increased steadily as well. Over the last year, Yuba (-15.1%) had the steepest declines, followed by Chico (-10.3%), Merced (-8.9%), Bakersfield (-8.6%), Modesto (-7.8%), and Stockton (-7.3%).
  • On California’s Central Coast, Salinas added the largest number of jobs, with payrolls increasing by 1,700 during the month. Payrolls in San Luis Obispo (300) also increased during the month. From a year-over-year perspective, Santa Cruz (-12.8%) shed positions at the fastest rate, followed by San Luis Obispo (-12.2%), Salinas (-10.0%), and Santa Barbara (-7.5%).

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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.