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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

California Continues to Struggle with Labor Supply as Employment Expands Modestly

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State’s Unemployment Rate Remains Highest In Nation

California’s labor market expanded modestly in April, with total nonfarm employment in the state growing by 5,200 positions over the month, according to an analysis released today by Beacon Economics. March’s gains were revised down to 18,200 in the latest numbers, a 10,100 decline from the preliminary estimate of 28,300.

As of April 2024, California has recovered all of the jobs that were lost in March and April 2020, and there are now 314,300 more people employed in the state compared to February 2020. Total nonfarm employment has grown 1.8% over this time compared to a 3.9% increase in the United States overall. California increased payrolls by 1.2% from April 2023 to April 2024, trailing the 1.8% increase nationally over the same period.

The state’s unemployment rate held steady at 5.3% in April 2024, unchanged from the previous month. California’s unemployment rate is the highest in the nation and remains elevated relative to the 3.9% rate in the United States as a whole. The state continues to struggle with its labor supply, which remained essentially unchanged in April (declining by a negligible 100). Since February 2020, California’s labor force has fallen by -246,200 workers, a -1.3% decline. In comparison, over the past twelve months the nation’s labor force has increased by 0.8%. 

Industry Profile  

  • At the industry level, job gains were mixed in April. Health Care led the way with payrolls expanding by 10,100, an increase of 0.4% on a month-over-month basis. With these gains Health Care payrolls are now 13.6% above their pre-pandemic peak.
  • Other sectors posting strong gains during the month were Transportation, Warehousing, and Utilities (3,700 or 0.4%), Leisure and Hospitality (3,100 or 0.2%), Government (2,600 or 0.1%), Education (1,800 or 0.4%), Retail Trade (1,000 or 0.1%), and Wholesale Trade (400 or 0.1%).
  • Payrolls decreased a handful of sectors in April. Construction experienced the largest declines, with payrolls falling by -6,000, a contraction of -0.6% on a month-over-month basis. Note that this decline was largely due to late season storms affecting construction projects across the state.
  • Other sectors posting significant declines during the month were Manufacturing (-5,300 or -0.4%), Professional, Scientific, and Technical Services (-3,600 or -0.3%), Real Estate (-700 or -0.2%), Finance and Insurance (-700 or -0.1%), Administrative Support (-600 or -0.1%), and Information (-600 or -0.1%).

Regional Profile

  • Regionally, job gains were led by Southern California. Los Angeles (MD) saw the largest increase, where payrolls grew by 5,700 (0.2%) during the month. The Inland Empire (2,600 or 0.2%) and San Diego (1,200 or 0.1%) also saw their payrolls jump during the month. However, payrolls fell in Orange County (-2,700 or -0.2%), Ventura (-500 or -0.2%), and El Centro (-2,200 or -0.3%). Over the past year, El Centro (1.9%) has had the fastest job growth in the region, followed by the Inland Empire (1.5%), Ventura (1.4%), Orange County (1.1%), San Diego (0.8%), and Los Angeles (MD) (0.6%).
  • In the Bay Area, the East Bay experienced the largest increase, with payrolls expanding by 2,600 (0.2%) positions in April. San Rafael (MD) (200 or 0.2%) and Napa (100 or 0.1%) also saw payrolls increase during the month. However, San Francisco (MD) (-1,700 or -0.1%), Santa Rosa (-600 or -0.3%), and Vallejo (-600 or -0.2%) experienced payroll declines during the month. Over the past 12 months, Vallejo (3.0%) enjoyed the fastest job growth in the region, followed by Santa Rosa (2.3%), Napa (2.2%), San Rafael (MD) (1.6%), the East Bay (0.9%), San Jose (0.2%), and San Francisco (MD) (-0.8%).
  • In the Central Valley, Sacramento experienced the largest monthly increase as payrolls expanded by 900 (0.1%) positions in April. Payrolls in Yuba (400 or 0.8%), Bakersfield (300 or 0.1%), Fresno (300 or 0.1%), and Visalia (100 or 0.1%) increased as well. However, payrolls fell in Stockton (-500 or -0.2%), Modesto (-200 or -0.1%), Merced (-200 or -0.3%), Redding (-100 or -0.1%), and Hanford (-100 or -0.2%). Over the past year, Madera (5.7%) had the fastest growth, followed by Yuba (4.2%), Merced (3.7%), Modesto (3.6%), Sacramento (2.5%), Hanford (2.4%), Redding (2.3%), Fresno (2.2%), Visalia (2.1%), Stockton (2.0%), Chico (1.5%), and Bakersfield (1.1%).
  • On California’s Central Coast, Salinas (200 or 0.1%) and Santa Cruz (200 or 0.2%) added the largest number of jobs during the month. Santa Barbara (-100 or -0.1%) saw payrolls decline. From April 2023 to April 2024, Salinas (1.9%) has added jobs at the fastest rate, followed by Santa Cruz (1.6%), Santa Barbara (0.8%), and San Luis Obispo (0.5%).
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Career & Workplace

Inland Economic Growth & Opportunity (IEGO) Announces 2024 Priorities

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Strategic Vision: Prioritizing Sustainable Growth and Enhanced Opportunities in the Inland Region

The Inland Economic Growth & Opportunity (IEGO), a collaborative organization dedicated to fostering economic growth, has announced its 2024 strategic priorities designed to create a vibrant, inclusive, and sustainable economy for Southern California’s Inland Empire. Among its immediate priorities include its role in Governor Newsom’s California Jobs First regional jobs strategy.

“As one of the California Jobs First statewide collaboratives, IEGO is committed to engaging a wide ranging and diverse group of stakeholders in our economic development focus so that we can improve the quality of life for all residents across the region,” said IEGO Executive Director Matthew Mena.

IEGO’s strategy is critical. While Inland Southern California remains one of California’s top job growth markets, it also ranks as having the lowest average weekly wages according to employment data for the nation’s 50 largest county job markets as reported by the US Bureau of Labor Statistics.

The IEGO 2024 priorities are designed to counter that trend and encourage greater business investment, including:

California Jobs First: IEGO will develop Inland Southern California’s regional jobs strategy to create quality jobs and a more accessible economy as part of Governor Newsom’s very intentional, inclusive approach to economic and workforce development to maximize state resources and investments by empowering communities to chart their own futures. Much of the funding will support career development projects from capacity building to industry-specific programs, and new job training.

Center of Excellence: As one of the state’s designated Center of Excellence, IEGO will support the region’s community colleges and their partners by providing research on the local labor market, including information on job growth, wages, demographics, top employers, education, and skill requirements, as well as education outcomes for industries and occupations critical to the Inland Empire’s economy. This data will help inform the development of new community college programs, curriculum, and partnerships that the colleges pursue in their efforts to prepare residents for high-paying, fast-growing jobs that Inland Empire businesses need today and in the future. 

Regional Marketing: IEGO will work to ensure that the region is well positioned to benefit from public and private investment and is fully recognized for its economic strength and opportunity. In this way, IEGO can enhance the delivery of public and private resources to the two-county region.

“There’s real opportunity for the IEGO Center of Excellence to lead deeper economic and workforce research. One of the immediate areas is our Top 50 Jobs report. We want to better identify the best job opportunities and pathways for workers in struggling families to make ends meet and build wealth,” said Andy Hall, who is leading report development for the Center of Excellence.

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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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