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California’s Annual Jobs Revision Shows the Pandemic Hit Employment Much Harder Than Originally Estimated; Still, Outlook for 2021 Significantly Brighter

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Latest January Numbers: More Jobs Shed and Workforce Contracts

The annual benchmark revision released today by the California EDD saw 2020’s employment figures revised downwards significantly, according to an analysis released jointly by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development. Employment growth in the state from December 2019 to 2020 was revised down from -8.0% to -9.2%. This revision translates into 206,500 more jobs lost in California during the year than the EDD originally estimated.

Typically, annual revisions show greater job losses than were initially reported during recession periods, so this downward adjustment was somewhat expected. At the same time, the revised figures show the true magnitude of the hole that the pandemic and its effects left in the state’s labor market.

“As it turns out, the labor market fallout in 2020 was significantly worse in California than originally estimated,” said Taner Osman, Research Manager at Beacon Economics and the UCR Center for Forecasting. “And it hasn’t made the reading any prettier.”

Compared to December 2019, there 1.6 million fewer jobs in the state’s economy in December 2020; this compares to the EDD’s original estimate of 1.4 million fewer jobs. Likewise, the drop in the state’s labor force was revised downwards. During the year, 731,300 workers left the labor force, compared to the 523,000 contraction originally estimated. This translates into a labor force drop of -3.8% compared to the original estimate of -2.7%.

Thankfully, a modest recovery has been underway, and with new cases of the coronavirus falling in the state, accompanied by a loosening of health-mandated restrictions on business activity, the labor market should see a strong recovery in 2021. However, the extent of the labor market decline is sobering and employment growth in the state is nearly 2 million jobs behind trend. The labor market is unlikely to return to trend in 2021.

“While we expect a strong recovery in the labor market in 2021, it would take a hiring surge of unprecedented proportions to return the labor market to trend this year,” said Osman. “In fact, we’ll do well to just recover all the jobs lost in 2020 this year, never mind returning to trend.” 

At the industry level, the benchmark revision was mixed, with growth rates in some sectors revised upwards, while others were revised downwards. The biggest upward revisions to year-over-year growth rates (December 2019 to December 2020) were in Transportation, Warehousing & Utilities (from an estimate of -0.2% to a revised figure of 5.0%), Manufacturing (revised from -7.6% to -6.1%), Management (revised from -6.2% to -5.4%), Education (revised from -4.8% to -4.1%), and Government (revised from -7.6% to -7.3%).

The biggest downward revisions in year-over-year growth rates were in Mining and Logging (revised from -6.6% to -16.3%), Real Estate (revised from -2.2% to -8.0% revised), Leisure and Hospitality (revised from -29.8% to 35.4%), Other Services (revised from -20.3% to -23.9%), and Finance and Insurance (revised from 2.1% to -1.3%).

California’s annual benchmark revision was also mixed at the regional level, with growth rates revised up in some areas and down in others. The largest upward revisions in year-over-year growth rates were in Yuba (revised from -14.5% to -7.7%), Stockton (revised from -6.9% to -2.4%), Modesto (revised from -8.7% to -5.5%), Redding (revised from -6.0% to -4.1%), Madera (revised from -5.5% to -4.0%), and Fresno (revised from -6.5% to -4.9%). The largest downward revisions came in the state’s largest metro areas. Downward revisions occurred in Napa (revised from -8.0% to -11.6%), Santa Rosa (revised from -9.2% to -12.6%), San Francisco (MD) (revised from -9.9% to -12.7%), Los Angeles (MD) (revised from -9.1% to -11.6%), San Rafael (MD) (revised from -9.5% to -12.1%), and San Diego (revised from -6.9% to -8.8%).

January Numbers

Nonfarm employment in California stumbled out the gate to start 2021. The latest figures released by the California EDD reveal that the state shed 69,900 jobs in January.

Since the depths of the pandemic-driven labor market downturn in April, only 34% of the jobs lost have been recovered, and in January, there were 1.8 million fewer people employed in California than in February 2020. Total nonfarm employment in the state has contracted 10.2% since February 2020. This pace of growth trails the nation overall, where nonfarm employment has shrunk by 6.5% over the same period.

“The surge in new coronavirus cases that occurred in the fall of 2020 put the labor market recovery that had been underway on hold for four months,” said Osman. “Unfortunately, December’s and January’s job losses have returned employment levels in the state to where they were in September 2020. But even though this damage cannot be repaired overnight, the outlook for 2021 is much more positive.”

The January numbers show that California’s unemployment rate declined to 9.0%. However, this decline did not occur for all the right reasons. The state’s labor force also contracted by 36,500 in January, while household employment expanded by 31,800. From a year-over-year perspective, California’s labor force has contracted by 4.0%.

Industry Profile

  • The Retail Trade sector added more jobs in January than any other sector in the state’s economy, boosting payrolls by 25,400 positions. While this strong month helped recover some of the jobs lost during the economic downturn, the sector is still down 5.0% from a year-over-year perspective.
  • The Administrative Support sector also had a strong month, increasing payrolls by 4,900 in January. Other sectors posting strong gains in January were Government (3,600), Wholesale Trade (1,800), and Real Estate (1,000).
  • Payrolls decreased in a handful of sectors in January. Leisure and Hospitality posted the largest decline, where payrolls fell by 70,600. The month-over-month contraction also drove year-over-year declines to -38.9%.
  • Payrolls in Transportation, Warehousing, and Utilities (-13,500), Education (-10,000), Manufacturing (-4,600), Construction (-4,000), Other Services (-3,300), and Professional, Scientific, and Technical Services (-1,100) also contracted in January.

Regional Profile

  • Within the state, job declines were concentrated in Southern California. Orange County saw the steepest declines, where payrolls contracted by 22,900 during the month. San Diego (-14,600), the Inland Empire (-5,300), Los Angeles (MD) (-4,300), and Ventura (-1,100) also saw payrolls decline during the month. Over the past year, Los Angeles (MD) (-12.1%) has experienced the steepest job losses in the region, measured by percentage decrease, followed by Orange County (-11.7%), San Diego (-10.2%), El Centro (-9.9%), Ventura (-9.6%), and the Inland Empire (-6.3%).
  • In the San Francisco Bay Area, payroll growth was mixed with San Rafael (MD) leading the way, where payrolls expanded by 2,600 positions in January. Payrolls in the East Bay (2,300) also expanded during the month. In contrast, payrolls contracted in San Francisco (MD) (-4,800), Santa Rosa (-2,100), and San Jose (-1,800). From a year-over-year perspective, Santa Rosa (-13.9%) has had the steepest declines in the San Francisco Bay Area, followed by San Francisco (MD) (-13.4%), Napa (-11.9%), San Rafael (MD) (-10.5%), the East Bay (-9.7%), San Jose (-8.9%), and Vallejo (-8.5%).
  • In the Central Valley, Sacramento saw the strongest monthly gains, where payrolls increased by 3,200 positions. Redding (1,000), Visalia (700), Merced, (600), and Hanford (500) added jobs as well. Over the last year, Chico (-12.8%) had the steepest declines, followed by Yuba (-8.5%), Bakersfield (-8.0%), Visalia (-7.4%), Hanford (-6.3%), Sacramento (6.0%), Merced (-5.6%), and Modesto (-5.6%).
  • On the Central Coast, San Luis Obispo added the greatest number of jobs, with payrolls growing by 300 over the month. In Santa Cruz, 200 positions were added to local payrolls. From a year-over-year perspective, Santa Cruz (-11.8%) shed positions at the fastest rate, followed by San Luis Obispo (-10.6%), Salinas (-9.6%), and Santa Barbara (-9.5%).

Career & Workplace

California Employment Gains Pick Up in the Latest Numbers

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Hollywood Strike Effects: Job Sector That Houses Motion Picture and Sound Recording Sees Largest Decline

California’s labor market grew modestly in the latest numbers, with total nonfarm employment in the state expanding by 23,100 positions in August, according to an analysis released today by Beacon Economics. July’s gains were revised down to 8,900, a 19,000 decrease from the preliminary estimate of 27,900.

“It was a bit of mixed bag during August, with the largest regions in California both gaining and shedding jobs,” said Taner Osman, Research Manager at Beacon Economics. “However, following a couple of slower months, employment gains did pick up, which sets the state up nicely as we enter a seasonally strong part of the year.”

As of August 2023, California has recovered all of the jobs that were lost in March and April 2020 due to the pandemic. There are now 447,600 more people employed in the state compared to February 2020. Total nonfarm employment has grown 2.5% since that time compared to a 2.7% increase nationally. From August 2022 to August 2023, California increased payrolls by 1.9%, trailing the 2.0% increase nationally over the same period.

The state’s unemployment rate remained unchanged at 4.6% in August 2023. California’s unemployment rate is elevated relative to the 3.8% rate in the United States overall. The state is continuing to struggle with its labor supply, which fell by 18,000 in August, a decrease of 0.1% on a month-over-month basis. Since February 2020, the state’s labor force has fallen by 197,500 workers, a 1.0% decline.

Industry Profile  

  • At the industry level, job gains were mixed. The Health Care sector led the way with payrolls expanding by 11,400, an increase of 0.4% on a month-over-month basis. With these gains Health Care payrolls are now 9.0% above their pre-pandemic peak.
  • Government was the next best performing sector, adding 5,200 jobs, a month-over-month increase of 0.2%. With these gains, Government payrolls are now just 1.2%, or 32,500 jobs, below their pre-pandemic peak.
  • Other sectors posting strong gains during the month were Construction (4,700 or 0.5%), Administrative Support (3,800 or 0.3%), Other Services (3,800 or 0.6%), Leisure and Hospitality (2,800 or 0.1%), Education (2,600 or 0.6%), Transportation, Warehousing, and Utilities (1,400 or 0.2%), and Manufacturing (1,300 or 0.1%).
  • Payrolls decreased in only a handful of sectors in August. Information saw the largest declines with payrolls falling by 9,000, a drop of 1.5% on a month-over-month basis. This decline was driven by the ongoing strikes in Motion Picture and Sound Recording, which has shed 15,200 positions over the last year, a 9.0% decline. Other sectors posting declines during the month were Professional, Scientific, and Technical Services
    (-3,800 or -0.3%), Wholesale Trade (-1,100 or -0.2%), and Finance and Insurance (-800 or -0.1%).

Regional Profile

  • Regionally, job gains were led by the San Francisco Bay Area. The East Bay experienced the largest increase, with payrolls expanding by 2,700 (0.2%) positions in August. Santa Rosa (700 or 0.3%), San Rafael (MD) (200 or 0.2%), Vallejo (200 or 0.1%), and Napa (100 or 0.1%) also saw payrolls expand during the month. On the other hand, San Francisco (MD) (-1,200 or -0.1%) and San Jose (-500) experienced payroll declines. Over the past 12 months, the East Bay (2.5%) and Napa (2.5%) saw the fastest job growth in the region, followed by San Francisco (MD) (2.4%), San Rafael (MD) (2.3%), Santa Rosa (2.2%), San Jose (2.0%), and Vallejo (1.8%).
  • In Southern California, Orange County saw the largest increase, where payrolls grew by 7,100 (0.4%) during the month. San Diego (2,800 or 0.2%) and the Inland Empire (2,400 or 0.1%), also saw their payrolls jump. On the other hand, Los Angeles (MD) (-10,300 or -0.2%) and Ventura (-200 or -0.1%) experienced payroll declines during the month. Over the past year, San Diego (2.0%), Orange County (2.0%), and Los Angeles (MD) (2.0%) have enjoyed the fastest job growth in the region, followed by Ventura (1.6%), El Centro (1.2%), and the Inland Empire (0.6%).
  • In the Central Valley, Sacramento experienced the largest monthly increase as payrolls expanded by 2,700 (0.2%) positions in August. Payrolls in Fresno (1,100 or 0.3%), Stockton (800 or 0.3%), Hanford (400 or 0.9%), Redding (300 or 0.4%), Chico (200 or 0.3%), and Yuba (200 or 0.4%) also saw their payrolls jump. On the other hand, Bakersfield (-2,100 or -0.7%), Visalia (-900 or -0.6%), Merced (-500 or -0.7%), and Modesto (-200 or -0.1%) had payrolls fall during the month. Over the past year, Hanford (38%) enjoyed the fastest growth, followed by Yuba (3.7%), Sacramento (2.4%), Redding (2.0%), Fresno (1.9%), Merced (1.8%), Chico (1.7%), Stockton (1.4%), Madera (1.4%), Visalia (1.0%), Bakersfield (0.7%), and Modesto (-1.1%).
  • On California’s Central Coast, Salinas (1,000 or 0.7%) added the largest number of jobs. Santa Cruz (100 or 0.1%) also saw payrolls increase during the month. On the other hand, Santa Barbara (-1,000 or -0.5%) saw payrolls fall during the month. From August 2022 to August 2023, Salinas (4.7%) has added jobs at the fastest rate, followed by San Luis Obispo (3.8%), Santa Barbara (2.9%), and Santa Cruz (2.0%).
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Bizz Buzz

Colton Resident Receives Free College Tuition and Books Through Walmart’s Education Program

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By Saul Martinez, Contributing Writer for IEBJ

#bizzbuzz

This year marks the five-year anniversary of Walmart’s Live Better U (LBU) education program. Over the past five years, the company has saved associates across the country nearly half a billion in education costs, reflecting the company’s commitment to creating a path for everyone to learn and grow. In California, we’ve seen 5,620 Walmart and Sam’s Club associates participate in Live Better U over the past five years.

One such success story is Robert Gay, who lives in Colton, CA, and earned his college degree – fully paid for by Walmart. Robert was stuck in a stagnant position at his previous company, hindered by the absence of a degree that prevented him from advancing further. However, upon discovering the Live Better U benefits offered by Walmart, he decided to take a leap of faith and join their team with the intention of completing his degree. After successfully graduating with a bachelor’s degree in October 2020, he now takes immense pride in his accomplishment of accepting a promotion to associate general manager. Throughout his journey, Robert received overwhelming support from his local team, who not only empathized with his workload challenges but also aided when needed.

Most individuals typically encounter Walmart through its retail outlets. The Inland Empire Business Journal had the opportunity to explore a consolidation center of Walmart situated in Colton, California. Our visit left us deeply impressed by the remarkable cleanliness and impeccable condition of the facility, almost reminiscent of a high-end showroom.

While on the tour, we observed the diligent measures taken by the leadership to maintain employee motivation and awareness regarding the daily, weekly, and monthly performance Key Performance Indicators (KPIs) of the facility. These KPIs were prominently displayed on digital monitors throughout the premises. The Colton leadership created a mascot and call their team the Colton Eagles.

We found ourselves deeply impressed by this aspect of Walmart, which is often hidden from public view. Walmart unquestionably stands out as a company that not only offers excellent career opportunities but also boasts a remarkable 100% tuition reimbursement program. If you are seeking a career in the Inland Empire, this proves to be an exceptional workplace choice.

Whether someone is chasing their first job or the opportunity that will define their career, Walmart is committed to creating pathways of opportunity for everyone.  

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Business

Entertainment Industry Strikes: Job Numbers in Los Angeles Take a Hit

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State Labor Force Bumps Up… Finally

 California’s labor market grew only modestly in June (the latest numbers), with total nonfarm employment in the state expanding by 11,600 positions, according to an analysis released today by Beacon Economics. May’s gains were also revised down to 38,200, a 9,100 decrease from the preliminary estimate of 47,300.

“Job growth has slowed in the state over the past couple of months,” said Taner Osman, Research Manager at Beacon Economics. “This month’s job losses in Los Angeles are also noteworthy, following the strikes that are now occurring in the entertainment industry. As the largest labor market in the state, the strikes, which primarily affect the Los Angeles area, could act as a drag on state employment in the coming months.”

As of June 2023, California has recovered all of the jobs that were lost in March and April 2020, and there are now 417,300 more people employed in California compared to pre-pandemic February 2020. Total nonfarm employment in the state has grown 2.4% over this time compared to a 2.5% increase nationally. Annually, California increased payrolls by 2.2% from June 2022 to June 2023, trailing a 2.5% increase nationally.

California’s unemployment rate increased to 4.6% in June 2023, up 0.1 percentage-points from the previous month, and the state’s unemployment rate remains elevated relative to the 3.6% rate in the United States overall. California’s labor force grew by 13,600 in June, an increase of 0.1% on a month-over-month basis. Since February 2020, the state’s labor force has fallen by 157,300 workers, a 0.8% decline.

Industry Profile  

  • At the industry level, gains were mixed. Leisure and Hospitality led payroll increases in June, expanding by 6,800, a jump of 0.3% on a month-over-month basis. With these gains, Leisure and Hospitality payrolls are now just 0.2%, or 5,100 jobs, below their pre-pandemic peak.
  • Construction was the next best performing sector, adding 6,000 jobs, a month-over-month increase of 0.7%. Construction payrolls are now up 1.0% on a year-over-year basis.
  • Other sectors posting strong gains during the month were Professional, Scientific, and Technical Services (4,900 or 0.3%), Education (4,200 or 1.0%), Health Care (2,800 or 0.1%), Information (900 or 0.2%), and Finance and Insurance (300 or 0.1%).
  • Payrolls decreased in only a handful of sectors in June. Transportation, Warehousing, and Utilities had the largest declines in June, with payrolls falling by 4,500, a decline of 0.5% on a month-over-month basis. Other sectors posting losses during the month were Administrative Support (-4,400 or -0.4%), Retail Trade (-1,700 or -0.1%), Wholesale Trade (-1,400 or -0.2%), and Other Services (-1,100 or -0.2%).

Regional Profile

  • Regionally, job gains were led by the San Francisco Bay Area. San Jose experienced the largest increase, with payrolls expanding by 4,700 (0.4%) positions in June. San Francisco (MD) (3,100 or 0.3%), the East Bay (1,100 or 0.1%), Santa Rosa (300 or 0.1%), and Vallejo (200 or 0.1%) also saw payrolls expand during the month. Over the past 12 months, San Francisco (MD) (3.0%) has experienced the fastest job growth in the region, followed by San Jose (2.9%), Napa (2.8%), the East Bay (2.1%), Vallejo (2.1%), Santa Rosa (2.0%), and San Rafael (MD) (1.6%).
  • In Southern California, San Diego saw the largest increase, where payrolls grew by 5,700 (0.4%) during the month. The Inland Empire (600 or 0.0%) and El Centro (100 or 0.1%) also saw their payrolls jump. On the other hand, Los Angeles (MD) (-3,900 or -0.1%) and Ventura (-1,400 or -.4%) experienced declining payroll during the month. Over the past year, San Diego (3.1%), Orange County (2.4%), and Los Angeles (MD) (2.3%) have enjoyed the fastest job growth in the region, followed by El Centro (2.1%) Ventura (1.7%), and the Inland Empire (0.8%).
  • In the Central Valley, Sacramento experienced the largest monthly increase, as payrolls expanded by 1,100 (0.1%) positions in June. Merced (900 or 1.3%), Bakersfield (300 or 0.1%), Fresno (300 or 0.1%), Stockton (300 or 0.1%), and Madera (200 or 0.5%) also saw their payrolls jump during the month. Over the past year, Hanford (4.1%) has had the fastest growth, followed by Fresno (3.2%), Madera (2.9%), Visalia (2.8%), Sacramento  (2.7%), Yuba (2.6%), Bakersfield (2.1%), Modesto (1.8%), Chico (1.7%), Stockton (1.6%), Merced (1.1%), and Redding (1.0%).
  • On California’s Central Coast, Salinas (500 or 0.3%) added the largest number of jobs. Santa Barbara (200 or 0.1%) also experienced payroll increases during the month. On the other hand, payrolls declined in Santa Cruz (-500 or -0.5%) and San Luis Obispo (-200 or -0.2%). From June 2022 to June 2023, Salinas (4.0%) added jobs at the fastest rate, followed by San Luis Obispo (3.7%), Santa Barbara (3.1%), and Santa Cruz (2.8%).
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