California Job Growth Keeps on Rolling

State Has Added 250,000 Jobs in 2023 Alone… But Labor Force Struggles to Continue; State Unemployment Rate Remains Elevated Compared To Nation

California’s labor market continued to expand in May, with total nonfarm employment in the state growing by 47,300 positions, according to an analysis released today by Beacon Economics. April’s gains were also revised up to 69,900 in the latest numbers, a 2,900 increase from the preliminary estimate of 67,000.

As of May 2023, there are now 415,600 more people employed in California compared to February 2020, the pre-pandemic peak of payroll employment. Total nonfarm employment in the state has grown 2.4% during this time compared to a 2.5% increase in the nation as a whole. From May 2022 to May 2023, California also increased payrolls by 2.4%, trailing the 2.7% increase nationally over the same period.

“Although the writers’ strike and recent tech industry layoffs have captured headlines, overall, California employers have continued to expand payrolls,” said Taner Osman, Research Manager at Beacon Economics. “In the first five months of this year, the state’s economy has added more than 250,000 jobs, and during a time when many forecasted that we’d be in recession. Moreover, we haven’t yet moved into a seasonally strong period of the year.”

California’s unemployment rate remained at 4.5% in May, unchanged from the previous month. The state’s unemployment rate remains elevated relative to the 3.7% rate in the United States overall. California is continuing to struggle with its labor supply, which grew by 24,700 in May, an increase of 0.1% on a month-over-month basis. Since February 2020, the state’s labor force has contracted by 171,200 workers, a 0.9% decline.

Industry Profile  

• At the industry level, job gains were broad-based in the latest numbers. Health Care led the way with payrolls expanding by 15,300, an increase of 0.6% on a month-over-month basis. The Health Care sector accounted for nearly one in three of the net jobs added in the state in May. Health Care payrolls are now up 5.4% on a year-over-year basis.
• Professional, Scientific, and Technical Services was the next best performing sector, adding 11,600 jobs, a month-over-month increase of 0.8%. Professional, Scientific, and Technical Services payrolls are now up 3.3% on a year-over-year basis.
• Other sectors posting strong gains during the month were Leisure and Hospitality (9,800 or 0.5%), Construction (6,500 or 0.7%), Other Services (5,700 or 1.0%), Retail Trade (5,200 or 0.3%), Transportation, Warehousing, and Utilities (2,400 or 0.3%), Government (2,200 or 0.1%), Education (1,100 or 0.3%), and Finance and Insurance (1,000 or 0.2%).
• Payrolls decreased in only a handful of sectors in May. Wholesale Trade saw the largest declines, with payrolls falling by 5,800, a drop of 0.9% on a month-over-month basis. The only other sectors with significant job losses during the month were Manufacturing (-5,700 or -0.4%) and Information (-2,800 or 0.5%).

Regional Profile

• Regionally, job gains were led by Southern California. Los Angeles (MD) saw the largest increase, where payrolls grew by 8,400 (0.2%) during the month. The Inland Empire 7,700 or 0.3%), Orange County (3,500 or 0.2%), San Diego (3,300 or 0.2%), and Ventura (1,600 or 0.5%) also saw their payrolls expand during the month. Over the past year, San Diego (2.9%), Orange County (2.9%), and El Centro (2.9%) saw the fastest job growth in the region, followed by Los Angeles (MD) (2.5%), Ventura (2.2%), and the Inland Empire (1.1%).
• In the San Francisco Bay Area, the East Bay experienced the largest increase, with payrolls expanding by 4,700 (0.4%) positions in May. San Francisco (MD) (3,600 or 0.3%), San Jose (1,400 or 0.1%), San Rafael (MD) (500 or 0.4%), Vallejo (400 or 0.3%), and Napa (200 or 0.3%) also saw payrolls expand during the month. Over the past 12 months, Napa (2.9%) and San Francisco (MD) (2.9%) have enjoyed the fastest job growth in the region, followed by San Jose (2.8%), Vallejo (2.4%), the East Bay (2.3%), Santa Rosa (2.2%), and San Rafael (MD) (1.5%).
• In the Central Valley, Sacramento experienced the largest monthly increase, where payrolls expanded by 6,800 (0.6%) positions in May. Payrolls in Bakersfield (1,200 or 0.4%), Fresno (1,100 or 0.3%), Modesto (800 or 0.4%), Visalia (400 or 0.3%), and Hanford (400 or 0.9%) also saw their payrolls jump during the month. Over the past year, Hanford (6.4%) has enjoyed the fastest growth, followed by Madera (4.0%), Fresno (3.3%), Visalia (3.1%), Yuba (3.0%), Sacramento  (2.8%), Modesto (2.7%), Redding (2.5%), Stockton (2.3%), and Bakersfield (2.3%).
• On California’s Central Coast, Santa Barbara (1,000 or 0.5%) added the largest number of jobs. Salinas (700 or 0.5%), San Luis Obispo (400 or 0.3%), and Santa Cruz (200 or 0.2%) also saw payrolls increase during the month. From May 2022 to May 2023, Salinas (4.0%) has added jobs at the fastest rate, followed by San Luis Obispo (3.2%), Santa Cruz (3.1%), and Santa Barbara (3.0%).