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%).