Beacon Employment Report California

In December, California’s labor market saw its first loss of jobs since April, according to an analysis released jointly by the UCR School of Business Center for Economic Forecasting and Development and Beacon Economics.

Total nonfarm employment in the state declined by 52,200 positions over the month. Over the course of 2020, California’s economy shed 1.4 million jobs, the first time the state has recorded an annual loss of jobs since 2009. It is important to note that annual figures will be revised and finalized by the California Employment Development Department in March and are subject to change.

Since the depths of the labor market downturn in April, only 44% of the jobs lost in California have been recovered. In December, there were 1.5 million fewer people employed in the state than in February 2020. Total nonfarm employment has contracted by 8.3% since February. This pace of growth trails the nation overall, where the number of jobs has shrunk by 6.5% over the same period.

“Unfortunately, California’s job losses in December were not unexpected,” said Taner Osman, Research Manager at Beacon Economics and the UCR Center. “As the spread of Covid-19 was rampant in the state’s major population centers, business closures to contain the spread of the virus also came at the cost of jobs. The situation is unlikely to improve much in January, although, for the first time, there is some real hope, with the roll out of vaccines, that the labor market can pick up real momentum in the spring.”

California’s unemployment rate grew to 9.0% in December, up from 8.1% in the previous month, and the number of workers on the state’s unemployment rolls expanded by 163,700. California’s unemployment rate remains elevated relative to the 6.7% rate in the United States overall. At the beginning of 2020, the state’s unemployment rate stood at 3.9%, meaning it has more than doubled over the course of the year. In a positive sign, California’s labor force continued to expand in December, growing by 72,200, as workers felt encouraged and returned to the labor market. Over the course of 2020, the state’s labor force – a measure of both those working and those who are looking for work – declined by just over half a million workers.

The Beacon Employment Report | California is a unique analysis of California’s employment numbers and trends. Each month, we link our own econometric predictions to data released by the U.S. Bureau of Labor Statistics and the California Employment Development Department to identify important changes in employment across industries and regions. The Beacon Employment Report is also one of the few analyses that uses seasonally adjusted numbers, which are critical to revealing accurate trends and insights within data. The analysis is a sample of the kind of research available from the Center for Economic Forecasting and Development.