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Pre Coronavirus Job Numbers Show Modest Growth But New World Of ‘Containment’ Means Drop In Spending And Job Losses To Come 


Pre Coronavirus: State Labor Force Accelerates, Unemployment Rate Remains Steady

March 13, 2020 — Today’s release from Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development includes analysis and commentary on both the January employment numbers (the latest) and the annual benchmark revision from the California Employment Development Department (EDD).

Annual Revision

The annual benchmark revision released today by the California EDD saw 2019’s employment figures revised downwards. Employment growth in the state from 2018 to 2019 was revised down from 1.7% to 1.5%. This revision translates into 38,900 fewer jobs added in the state during the year than the EDD had originally estimated. 

“Despite the slight downward revision, the California economy turned in another strong performance in 2019 which is very welcome at the moment,” said Taner Osman, Research Manager at Beacon Economics and the UCR Center for Forecasting. “While the coronavirus outbreak has injected major uncertainty into the 2020 outlook, California’s labor market enters this uncertainty from a position of strength, which should help dampen the effect of a short-term contraction in economic activity.”

The state’s labor force growth also saw revisions. Year-over-year, labor force growth was revised up to 0.6% from 0.5%.  This means that 78,200 more people joined the labor force during the year than originally estimated. 

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 (2018 to 2019) were in Transportation, Warehousing & Utilities (from an estimate of 2.3% to a revised figure of 5.4%), Real Estate (revised from 1.4% to 2.6%), Information (revised from 2.4% original to 3.5%), Professional, Scientific, & Technical Services (revised from  3.0% to 4.0%), and Other Services (revised from 0.4% to 0.8%).

The biggest downward revisions in year-over-year growth rates were in Administrative Support (revised from 2.5% to 0.3%), Retail Trade (revised from -0.5% to -1.6% revised), Management (revised from 1.0% to 0.0%), Manufacturing (revised from 0.9% to 0.0%), Mining and Logging (revised from 1.1% to 0.4%), Finance and Insurance (revised from -0.2% to -0.8%), and Construction (revised from 3.4%  to 2.7%).

The annual benchmark revision was also mixed at the metro region level, with growth rates revised up in some regions and down in others. The largest upward revisions in year-over-year growth rates were in Yuba (revised from 1.9% to 4.9% ), Stockton (revised from 0.2% to 2.3%), El Centro (revised from 0.4% to 1.9%), Vallejo (revised from 0.0% to 1.2%), Redding (revised from 1.0% to 1.6%), and the Inland Empire (revised from  1.8% to 2.4%). The largest declines in year-over-year growth rates from 2018 to 2019 were in Chico (revised from 1.7% to -2.2%), San Rafael (MD) (revised from 2.4% to 0.4%), Salinas (revised from 3.2% to 1.6% ), the East Bay (revised from 1.7% to 0.5%), San Jose (revised from 2.7% to 1.8%), Santa Rosa (revised from 1.3% to 0.5%), Fresno (revised from 3.2% to 2.4%), and Hanford (revised from 1.3% to 0.8%).

January Numbers

Nonfarm employment in California began 2020 with modest gains. The latest figures released by the California EDD reveal that employment in the state grew by 21,400 jobs in January, and since January 2019, California has added 251,800 jobs, the equivalent of a 1.5% year-over-year increase, surpassing the nation’s growth rate of 1.4%.

But it’s a different world today. “Monthly job releases usually provide an important read on the economy, enabling us to track trends in growth and take the temperature of recent hiring activity,” said Osman. “In view of the coronavirus outbreak, January’s figures relate to a different economic reality. In a world of containment, in the short-term, we’ll likely see a precipitous fall in discretionary spending which will almost surely lead to job losses in ‘experiential’ sectors of the economy, such as the arts and entertainment, and restaurants and tourism. If containment is short-lived, however, we should expect spending to rebound quickly, and job growth to return.”

The January numbers show that California’s unemployment rate held steady at 3.9%, maintaining its record low. The state’s labor force also expanded by 26,100 in January, which would normally improve the overall job outlook although the effects of the coronavirus are expected to have a negative impact in at least the near term. Year-over-year gains for California’s labor force now stand at 0.7%, a considerable increase from the 0.2% increase reported in last month’s figures.

Key January Findings

  • The Leisure and Hospitality sector added more jobs in January than any other sector in the state’s economy, boosting payrolls by 7,800 positions. Since January 2019, the sector grew at a steady pace, increasing payrolls by 1.7%. However, the current outlook for this sector is almost certainly weak. The effect of COVID-19 does not register in the current numbers and will not appear in the numbers in a meaningful way until data for April are available. The closing of major entertainment establishments, the postponement or cancellation of large public gatherings, as well as the overall decrease in travel, will very likely have a negative impact on jobs in this sector in the coming months.
  • The Health Care sector also had a strong month, increasing payrolls by 6,800 in January. Other sectors posting strong gains in January were Information (5,500), Transportation, Warehousing, and Utilities (3,400), Wholesale Trade (2,600), and Other Services (2,500).
  • Over the twelve-month period from January 2019 to January 2020, Transportation, Warehousing, and Utilities (4.2%), Information (4.2%), Educational Services (3.9%), Health Care (3.0%), Professional, Scientific, and Technical Services (2.8%), and Construction (2.0%) experienced the biggest job gains.
  • Despite overall job growth in the state, payrolls decreased in a handful of sectors in January. Retail Trade posted the largest decline, where payrolls declined by 2,600. The month-over-month decline also drove year-over-year growth to a 1.2% decrease. Payrolls in Construction (-2,400), Professional, Scientific, & Technical Services (-2,300), Management (-1,600), and Manufacturing (-900) also contracted in January.
  • Within the state, job growth was led by Southern California. Los Angeles (MD) saw the biggest gains, where payrolls grew by 10,6000 during the month. Orange County (2,100), the Inland Empire (1,800), and San Diego (1,300) also enjoyed job gains. Over the past year, El Centro (1.9%) saw the fastest job growth in the region, followed by the Inland Empire (1.5%), Los Angeles (MD) (1.4%), Ventura (1.4%), San Diego (1.3%), and Orange County (1.1%).
  • In the Bay Area, San Francisco (MD) led the way, where payrolls expanded by 3,500 positions in January. San Jose (2,900), the East Bay (1,100), and San Rafael (MD) (700) also increased payrolls during the month. Over the past year, San Francisco (MD) (3.0%) saw the fastest job growth in the region, followed by Napa (2.3%), San Rafael (MD) (1.8%), Santa Rosa (1.8%), and San Jose (1.4%).
  • In the Central Valley, Bakersfield saw the biggest monthly gains, where payrolls increased by 400 positions. Modesto (300), Sacramento (300), Merced, (200), and Yuba (200) added jobs as well. Over the past 12 months, Yuba (8.4%) saw the fastest growth, followed by Bakersfield (2.3%), Fresno (2.1%), Modesto (1.8%), and Visalia (1.6%).
  • On the Central Coast, San Luis Obispo added the greatest number of jobs, with payrolls growing by 400 over the month. In Santa Barbara, 200 positions were added to local payrolls. From January 2019 to January 2020, San Luis Obispo (1.9%) added jobs at the fastest rate, followed by Santa Cruz (1.5%), Salinas (1.4%), and Santa Barbara (1.1%).


 Beacon Economics is an independent economic research and consulting firm based in Los Angeles. The UCR School of Business Center for Economic Forecasting and Development is the first world class university forecasting center in the Inland Empire. This analysis was authored by Christopher Thornberg, Taner Osman, and Brian Vanderplas. Learn more at and

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Inland Empire Business Journal
The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.