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June 18, 2021

Beacon Employment Report | California

Presented by Beacon Economics

Copyright © Beacon Economics LLC

California Outpacing Nation In Employment Growth In 2021

State Recovery Still Lags Nation Overall, But More Rapid Expansion Expected Over Summer


 Jobs Added In May

California’s labor market continued to expand at a rapid pace in May, according to an analysis released jointly with Beacon Economics. Total nonfarm employment in the state grew by 104,500 positions over the month and California accounted for 18.7% of the 559,000 net jobs added in the nation.

In addition to California’s strong monthly gains in May, April’s gains were revised up to 102,000 in the latest numbers, a +200 increase from the preliminary estimate of 101,800.

1.31 million

Fewer People Employed

Over the past four months, California’s economy has added close to 500,000 jobs, representing the fastest hiring surge since summer 2020. These gains are very welcome since, as of May 2021, there were still 1.31 million fewer people employed in California than in February 2020. Total nonfarm employment in the state has contracted 7.4% since that time. This compares unfavorably to the national picture, where the labor market has shrunk by 5.0% over the same period.

Given that the state fully reopened its economy on June 15th, the recent surge in hiring is expected to continue over the summer. And because California’s labor market recovery has lagged the nation’s, the state should see more rapid growth (relative to the U.S.) in the coming months.


Unemployment Rate

California’s unemployment rate fell to 7.9% in May, a 0.1 percentage-point decline from the previous month, and the state’s labor force expanded by 12,400. California’s unemployment rate remains elevated relative to the 5.8% rate in the United States overall. Since February 2020, the state’s labor force has fallen by 525,400 workers, a 2.7% decline.

“It has been an encouraging few months, with employment growth in California outpacing the rate of growth nationally in 2021,” said Taner Osman, Research Manager at Beacon Economics and the Center for Forecasting. “Although the labor market recovery in the state lags the nation overall, the recent reopening of California’s economy will hopefully go some way towards closing that gap.”



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.

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