November 20, 2020
Beacon Employment Report | California
Presented by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development
Welcome to the Beacon Employment Report | California, 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 UC Riverside School of Business Center for Economic Forecasting and Development.
CALIFORNIA JOB GROWTH ENJOYS FASTEST PACE IN MONTHS; SIGNIFICANT LABOR FORCE EXPANSION ALSO A BRIGHT SPOT BUT RESURGENCE IN COVID-19 CASES WILL SLOW MOMENTUM
CA Unemployment Rate Declines Again; Remains Higher Than Nation As A Whole
California’s labor market recovery regained some momentum in October, with the level of employment growing at its fastest pace since June, according to an analysis released jointly by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development. Total nonfarm employment in the state expanded by 145,500 positions over the month.
The robust job gains were coupled with a significant drop in the state’s unemployment rate, which declined to 9.3% in October, down from 11.1% in the previous month. That said, the state’s unemployment rate remains elevated relative to the nation as a whole, which has a rate of 6.9%. While the state’s falling unemployment rate in recent months has been aided by a contracting labor force, in October, California’s labor force expanded significantly, growing by an impressive 609,100. The state’s labor force is still 238,300 lower than pre-pandemic levels, but a long way from the lows of May.
“The expansion of the state’s labor force is one of the brightest spots we have seen in the labor market for many months,” said Taner Osman, Research Manager at the UCR Center for Forecasting and Beacon Economics. “Unfortunately, it comes just as Covid-19 cases are again surging in California and restrictions on activity have been put in place. Beyond the public health effects, the new surge is terrible timing for the 1.5 million workers who have been out of a job since February.”
Despite the solid performance, only 44% of the jobs lost in California during the pandemic have been recovered, with 1.5 million fewer workers employed compared to February 2020. Total nonfarm employment in the state has contracted by 8.4% since February. This pace of growth trails the nation overall, where the labor market has shrunk by 6.6% over the same period. The new statewide restrictions on business activity and consumer behavior that were announced this week, will act as a speed bump to the momentum gained this month, according to the analysis.