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California Job Recovery Booms in Latest Numbers; Delta Variant Could Create Labor Supply Headwinds

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State’s Unemployment Rate Holds Steady As Workforce Expands

California’s labor market continued to expand at a rapid pace in July, with total nonfarm employment in the state growing by 114,400 positions, according to an analysis released jointly by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development. June’s gains were revised down to 57,200 in the latest numbers, a 17,300 decrease from the preliminary estimate of 74,500.

While California has added jobs at a healthy pace in 2021, as of July 2021, there were still 1.13 million fewer people employed in the state than in February 2020. Total nonfarm employment has contracted 6.4% since that time. California compares unfavorably to the nation, where the labor market has shrunk by 3.7% over the same period. However, with a larger portion of its workforce to be recovered, California should continue to see more rapid growth relative to the nation in the coming months.

Following impressive job gains throughout the summer, the state has reached an intriguing point in its labor market recovery. “Labor shortages have been driven in part by school closures, as parents have left the labor force to care for children,” said Taner Osman, Research Manager at Beacon Economics and the UCR Center for Forecasting. “With schools re-opening, we could see a surge of workers return to the labor market, easing labor shortages.” On a darker note, Osman said the spread of the delta variant might cause some workers to remain out of the labor force, which would act as a short-term headwind to labor supply.

California’s unemployment rate held steady at 7.6% in July, unchanged from the previous month, and the state’s labor force expanded by 50,300. California’s unemployment rate remains elevated relative to the 5.4% rate in the United States overall. Since February 2020, the state’s labor force has fallen by 505,500 workers, a 2.6% decline.

Industry Profile

At the industry level, the largest jobs gains continue to occur in the 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 payroll gains in July, with payrolls expanding by 56,600. 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 427,000 (-20.7%) since its previous peak in February 2020.
  • Other sectors posting strong gains during the month were Government (35,900), Health Care (7,300), Other Services (6,400), Wholesale Trade (4,700), Information (4,600), and Professional, Scientific & Technical Services (4,200).
  • A handful of sectors saw their payrolls decline in July. These included Manufacturing (-4,500), Retail Trade (-2,300), Transportation, Warehousing, & Utilities (-1,400), Finance & Insurance (-1,100), and Management (-700).

Regional Profile

  • Regionally, job gains were led by Southern California. Los Angeles (MD) saw the largest increase, where payrolls grew by 26,600 (0.6%) during the month. Orange County (12,400 or 0.8%), San Diego (9,700 or 0.7%), and Ventura (1,100 or 0.4%) also saw their payrolls jump during the month. The Inland Empire (74.7%) has experienced the strongest recovery in the region, measured by the percentage of jobs recovered from April 2020 to July 2021 relative to the jobs lost from February 2020 to April 2020, followed by Orange County (62.8%), Ventura (61.5%), El Centro (58.3%), San Diego (57.0%), and Los Angeles (MD) (47.9%)
  • In the San Francisco Bay Area, San Francisco (MD) experienced the largest jobs increase, with payrolls expanding by 7,300 (0.7%) positions in July. San Jose (4,600 or 0.4%), Santa Rosa (2,000 or 1.0%), San Rafael (MD) (1,000 or 0.9%), Vallejo (700 or 0.5%), and Napa (400 or 0.6%) also saw payrolls expand during the month. Since April 2020, San Rafael (MD) (68.8%) has experienced the strongest recovery in the region, followed by Napa (59.4%), Vallejo (55.3%), Santa Rosa (52.34%), San Jose (50.8%), the East Bay (45.7%), and San Francisco (MD) (43.1%).
  • In the Central Valley, Merced experienced the largest monthly increase, as payrolls expanded by 3,500 (5.2%) positions in July. Payrolls in Fresno (2,000 or 0.6%), Sacramento (1,900 or 0.2%), Bakersfield (1,700 or 0.7%), Stockton (1,400 or 0.6%), and Modesto (1,100 or 0.6%) increased steadily as well. Since April 2020, Merced (107.6%) has experienced the strongest recovery in the region, followed by Stockton (87.9%), Redding (80.5%), Modesto (74.4%), Sacramento (64.2%), Yuba (62.3%), and Fresno (60.7%).
  • On California’s Central Coast, Salinas added the largest number of jobs, with payrolls increasing by 4,600 (3.4%) during the month. Santa Cruz (1,000 or 1.1%), San Luis Obispo (900 or 0.8%), and Santa Barbara (500 or 0.3%) also saw payrolls expand during the month. Since April 2020, and Salinas (72.5%) has experienced the strongest recovery in the region, followed by Santa Barbara (60.3%), San Luis Obispo (44.3%), and Santa Cruz (40.0%).

Career & Workplace

The City of Rancho Cucamonga Recognized as U.S. Best-in-Class Employer by Gallagher 

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Gallagher’s Best-in-Class Benchmarking Analysis Identifies U.S. Organizations That Excel in Optimizing Employee and Organizational Wellbeing 

The City of Rancho Cucamonga participated in Gallagher’s 2023 U.S. Benefits Strategy & Benchmarking Survey and was identified as an organization that excelled in implementing successful strategies for managing people and programs. The City of Rancho Cucamonga was recognized for its comprehensive framework for strategically investing in benefits, compensation and employee communication to support the health, financial security and career growth of its employees at a sustainable cost structure. 

Designations like Gallagher’s Best-in-Class Employer help current and potential employees understand and appreciate an organization’s workplace culture and people strategy; important differentiators as employers compete for talent in today’s labor market. 

“This award is a testament to the collective dedication and unwavering commitment of our team, reflecting the high standards we uphold in fostering a workplace that thrives on innovation, belonging, and employee well-being.” Robert Neiuber, Senior Human Resources Director, City of Rancho Cucamonga. 

A U.S. Best-in-Class Employer, the City of Rancho Cucamonga was assigned points based on its relative performance in: 

  • Plan horizons for benefits and compensation strategies 
  • Extent of the wellbeing strategy 
  • Turnover rate for full-time equivalents (FTEs) 
  • Completion of a workforce engagement survey 
  • Use of an HR technology strategy and its level of sophistication 
  • Difference in healthcare costs over the prior year 
  • Use of a communication strategy 

The City of Rancho Cucamonga understands that high employee expectations haven’t budged in the changing labor market and have regularly examined their formula to attract and retain talent,” said William F. Ziebell, CEO of Gallagher’s Benefits & HR Consulting Division. “In doing so, the City of Rancho Cucamonga utilizes data, workforce feedback tools and clearly defined policies to provide competitive benefits and experiences that their employees value.” 

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Career & Workplace

California Labor Market Closes out 2023 with Modest Growth, but Expect Adjustments when Annual Revision Hits in March

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State’s Workforce Contracts Again; Unemployment Rate Ticks Up

California’s labor market grew modestly in the latest numbers, according to an analysis released today by Beacon Economics. Total nonfarm employment in the state expanded by just 23,400 positions in December, however, the sum of California’s metropolitan areas showed a more robust increase of 55,100 positions. November’s gains were revised down to 8,100 in the latest numbers, a 1,200 decrease from the preliminary estimate of 9,300.

“Although job and labor force growth has been muted, we caution against reading too much into these figures because this is the last release before the annual benchmark revisions in March,” said Justin Niakamal, Research Manager at Beacon Economics.

As of December 2023, California had recovered all of the jobs that were lost in March and April 2020, and there are now 508,100 more people employed in California compared to pre-pandemic February 2020. Total nonfarm employment in the state has grown 2.9% since that time compared to a 3.2% increase nationally. California increased payrolls by 1.7% from December 2022 to December 2023, matching the 1.7% increase nationally over the same period.

California’s unemployment rate rose to 5.1% in December 2023, up 0.2 percentage points 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 fell by 3,600 in December. Since February 2020, the state’s labor force has fallen by 243,800 workers, a 1.2% decline. 

Industry Profile  

  • At the industry level, gains were mixed. Healthcare led payroll gains in December, with payrolls expanding by 9,100, an increase of 0.3% on a month-over-month basis. With these gains Healthcare payrolls are now 10.8% above their pre-pandemic peak.
  • Government was the next best performing sector, adding 8,100 jobs, a month-over-month increase of 0.3%. However, with these gains Government payrolls are still 0.3%, or 28,400 jobs, below their pre-pandemic peak.
  • Other sectors posting strong gains during the month were Leisure and Hospitality (7,100 or 0.3%), Education (4,100 or 1.0%), Manufacturing (2,600 or 0.2%), Other Services (1,300 or 0.2%), Wholesale Trade (1,200 or 0.2%), Retail Trade (1,100 or 0.1%), and Real Estate (1,100 or 0.4%).
  • Payrolls decreased in a handful of sectors in December. Transportation, Warehousing, and Utilities experienced the largest payroll declines, with payrolls falling by 4,400, a decline of 0.5% on a month-over-month basis. Other sectors posting declines during the month were Administrative Support (-4,100 or -0.4%), Finance and Insurance (-2,200 or -0.4%), Information (-1,900 or -0.3%), Management (-400 or -0.2%), and Mining and Logging (-200 or -1.0%).

Regional Profile

  • Regionally, job gains were led by Southern California. The Los Angeles County (MD) saw the largest increase, where payrolls grew by 17,800 (04%) during the month. Orange County (6,800 or 0.4%), the Inland Empire (6,400 or 0.4%), San Diego (5,500 or 0.3%), Ventura (500 or 0.2%), and El Centro (200 or 0.3%) also saw their payrolls jump. Over the past year, Ventura (2.6%) experienced the fastest job growth in the region, followed by Orange County (2.1%), Los Angeles (MD) (2.1%), the Inland Empire (1.9%), El Centro (1.9%), and San Diego (1.5%).
  • In the Bay Area, San Francisco (MD) (6,500 or 0.5%) had the largest increase during the month. San Jose (3,000 or 0.3%), Napa (400 or 0.5%, Santa Rosa (400 or 0.2%), and San Rafael (MD) (200 or 0.2%) also saw payrolls expand. Over the past 12 months, Santa Rosa (2.9%) has enjoyed the fastest job growth in the region, followed by San Rafael (MD) (2.4%), the East Bay (1.9%), San Francisco (MD) (1.3%), Vallejo (1.3%), San Jose (1.1%), and Napa (0.8%).
  • In the Central Valley, Sacramento experienced the largest monthly increase as payrolls expanded by 2,400 (0.2%) positions in December. Payrolls in Fresno (1,500 or 0.4%), Merced (600 or 0.9%), Modesto (600 or 0.3%), Madera (300 or 0.7%), Redding (200 or 0.3%), and Yuba (200 or 0.4%) also saw their payrolls jump during the month. Over the past year, Sacramento (2.8%) enjoyed the fastest growth, followed by Yuba (2.7%), Modesto (2.7%), Hanford (2.4%), Fresno (2.2%), Visalia (1.9%), Bakersfield (1.1%), Stockton (0.6%), Madera (0.5%), Chico (0.3%), Merced (-0.3%), and Redding (-1.6%).
  • On California’s Central Coast, Santa Barbara (900 or 0.4%) added the largest number of jobs. Santa Cruz (500 or 0.5%) and San Luis Obispo (400 or 0.3%) also saw payrolls increase during the month. From December 2022 to December 2023, Salinas (4.61%) added jobs at the fastest rate, followed by Santa Barbara (3.4%), San Luis Obispo (2.7%), and Santa Cruz (2.4%).
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Business

The Inland Empire Regional Chamber of Commerce Announces the 2024 Human Resources Conference, led by Atkinson, Andelson, Loya, Rudd & Romo (AALRR)

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Uniting Leaders, Shaping Futures: Charting the Next Course in Human Resources

The Inland Empire Regional Chamber of Commerce, in partnership with Insight HR Consulting and presented by Atkinson, Andelson, Loya, Ruud & Romo (AALRR), announces the much-anticipated 2024 Human Resources Conference. Scheduled for February 15th, 2024, at the Jessie Turner Center, this event is set to be a landmark gathering for HR and business leaders.

Event Details:

  • Date: February 15th, 2024
  • Venue: Jessie Turner Center, [Full Address]
  • Title: 2024 2nd Annual Inland Empire HR Summit: Shaping the Future of Human Resources

The conference is hosted by The Inland Empire Regional Chamber of Commerce, in partnership with Insight HR Consulting. AALRR, a leading full-service law firm, is the presenting sponsor, bringing their extensive legal expertise in employment and labor to the forefront of the event.

“We are thrilled to sponsor and present at the upcoming 2024 Human Resources Conference,” said Amber Solano, AALRR’s Private Labor and Employment Law Practice Group Chair. “With all of the recent changes in the law, we feel this is going to be a valuable event for human resource and business leaders throughout the region.”

The conference offers an invaluable platform for professionals to engage with evolving trends and innovations in HR, preparing them to lead in the changing world of work.

Special Highlights:

  • Renowned HR thought leaders as keynote speakers.
  • Networking opportunities with industry experts and peers.
  • A special focus session by AALRR on the evolving legal landscape in human resources.

“The Inland Empire Regional Chamber of Commerce is proud to collaborate with Insight HR consulting and leading speakers AALRR.  This partnership strengthens our commitment to delivering a conference that truly impacts the HR and Business community.” said Edward Ornelas, Jr., CEO.

For the event schedule, registration, and sponsorship details, please visit hr.iechamber.org

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