State’s Unemployment Rate Unchanged As Workforce Expands
California’s labor market continued to expand at a steady pace in September, with total nonfarm employment in the state expanding by 47,400 positions, according to an analysis released jointly by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting and Development. This growth accounted for 24.4% of overall job gains in the nation in September. Note that August’s gains were revised down to 94,700 in the latest numbers, a 9,600 decrease from the preliminary estimate of 104,300.
“Job gains in California continue to show strength relative to the nation overall, but while these gains have been solid, there is still a sizable hole in the labor market, with a million fewer people employed than pre-pandemic,” said Taner Osman, Research Manager at Beacon Economics and the UCR Center for Forecasting. “Some states, by contrast, have already recovered all of the jobs lost due to the pandemic.”
While California has added jobs at a healthy rate in 2021, as of September, there were 991,000 fewer people employed in the state than in February 2020. Total nonfarm employment in California has contracted 5.6% since February compared to a 3.3% drop nationally. As a result, with a larger portion of its workforce still to be recovered, California should continue to see more rapid growth relative to the nation in the coming months.
California’s unemployment rate held steady at 7.5% in September, unchanged from the previous month, and the state’s labor force expanded by 30,500. California’s unemployment rate remains elevated relative to the 4.8% rate in the United States overall. Since February 2020, the state’s labor force has fallen by 419,700 workers, a 2.2% decline.
- At the industry level, the largest jobs gains continue to occur in sectors hit hardest 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 gains in September, with payrolls expanding by 23,300. Still, the sector has a long way to go to recover all the jobs it lost due to the economic downturn. In total, payrolls have fallen by 371,900 (-18.1%) since the previous peak in February 2020.
- Other sectors posting strong gains during the month were Professional, Scientific, and Technical Services (7,300), Manufacturing (5,700), Information (5,000), Transportation, Warehousing, and Utilities (3,600), Government (3,100), and Real Estate (2,400).
- A handful of sectors saw payrolls decline in September. These include Other Services (-3,700), Wholesale Trade (-2,600), Finance and Insurance (-1,100), and Management (-400).
- Job gains in the state were led by the San Francisco Bay Area. San Francisco (MD) and San Jose experienced the largest increase, with payrolls expanding by 6,000 (0.5%) positions in September. San Rafael (MD) (500 or 0.5%) and the East Bay (200 or 0.0%) also saw payrolls expand during the month. Since April 2020, San Rafael (MD) (72.2%) has experienced the strongest recovery in the region, measured by the percentage of jobs recovered from April 2020 to September 2021 relative to the jobs lost from February 2020 to April 2020. This is followed by Napa (63.4%), San Jose (59.4%), Vallejo (58.6%), Santa Rosa (54.0%), the East Bay (49.2%), and San Francisco (MD) (47.9%).
- Growth was mixed in Southern California. The Inland Empire saw the largest increase, where payrolls grew by 3,300 (0.2%) during the month. San Diego (3,200 or 0.2%), El Centro (100 or 0.2%), and Ventura (100 or 0.0%) also saw payrolls jump during the month. Los Angeles (MD) experienced the largest decrease, where payrolls fell 18,400 (-0.4%). Orange County (-2,200 or -0.1%) also saw payrolls decline during the month. The Inland Empire (77.5%) has experienced the strongest recovery in the region, followed by Orange County (65.0%), Ventura (64.5%), San Diego (58.6%), El Centro (58.3%), and Los Angeles (MD) (54.4%).
- In the Central Valley, Modesto experienced the largest monthly increase as payrolls expanding by 1,300 (0.7%) positions in September. Payrolls in Sacramento (1,100 or 0.1%), Visalia (800 or 0.6%), Redding (500 or 0.7%), Bakersfield (400 or 0.2%), Fresno (300 or 0.1%) Stockton (200 or 0.1%), and Hanford (100 or 0.3%) increased steadily as well. Since April 2020, Stockton (92.5%) has experienced the strongest recovery in the region, followed by Redding (90.9%), Modesto (74.4%), Sacramento (69.5%), Merced (66.7%), and Fresno (65.6%).
- On California’s Central Coast, Santa Barbara added the largest number of jobs, with payrolls increasing by 2,800 (1.5%) in September. Santa Cruz (300 or 0.3%) and San Luis Obispo (200 or 0.82%) also saw payrolls expand. Since April 2020, Santa Barbara (76.6%) has experienced the strongest recovery in the region, followed by Salinas (67.5%), Santa Cruz (51.2%), and San Luis Obispo (49.8%).