California unemployment rate falls in October as hiring increases

ADAM BEAM, Associated Press

After a lull in September, California employers rebounded sharply last month as they created 96,800 new jobs and brought the state’s unemployment rate down to 7.3%.

New data released on Friday showed job gains in all but one employment sector, led by clerk jobs in management and administration and additional jobs in restaurants and hotels. The government was the only sector to decline, shedding 4,000 jobs in the month.

California – the nation’s most populous state with nearly 40 million residents – accounted for 18.2% of the nation’s total job growth in October. Since February, California has created an average of more than 100,000 new jobs every month.

“California has again created more jobs than any other state – with average job growth in the six-digit range for nine straight months – an unprecedented feat as our economy continues to recover from the pandemic,” said Governor Gavin Newsom, a Democrat.

But a big reason California can create so many new jobs is because of how many jobs it lost at the start of the pandemic. California lost 2.7 million jobs in March and April 2020 after Newsom issued the nation’s first nationwide stay-at-home order due to the coronavirus.

It took 18 months to add 67.4% of those lost jobs back because California’s coronavirus restrictions have been in place longer at both state and local levels than any other state. While the unemployment rate in California fell to 7.3% in October, compared to 7.5% in September, it is still tied to Nevada for the highest rate in the country.

California’s unemployment claims remain higher than the national rate, accounting for more than 25% of all claims in the US last week. California’s workers make up 11.7% of the civilian workforce.

“Two things are true at the same time. These are strong job gains that are more in line with what we’ve seen for much of this year. At the same time, there are other economic employment indicators that point to a more uneven and subdued recovery, ”said Michael Bernick, a former director of the California Department of Employment Development who is now monitoring employment trends at the Duane Morris law firm.

The big question over the coming months is how will rising prices due to inflation affect the California labor market and the nation? Inflation can lead to higher wages for workers. However, higher prices can also lead consumers to buy less, which would hold back demand and encourage employers to shed jobs.

At the moment, price increases are being driven by increased demand combined with a shortage of goods due to interruptions in the supply chain. While inflation has averaged around 2% over the past decade, it has exceeded 5% since June, according to the California Legislative Analyst’s Office.

“Inflation is the greatest risk we face for the nation and then for the state. Unfortunately, in California as a state, we have no real control over it, ”said Sung Won Sohn, professor of finance and economics at Loyola Marymount University.

Son said most of California’s job growth was in Southern California, where Los Angles accounted for 42% of that growth and San Diego for 28%. This was driven by growth in hotels and restaurants in the wake of increasing tourism.

New rules went into effect in Los Angeles this month requiring everyone to provide evidence that they have received the coronavirus vaccine before entering public places, including restaurants. City officials have announced that they will not enforce the rules until November 29th.

Sohn says these rules, which are among the strictest in the country, are likely to have some impact on attitudes, but are unlikely to “turn the trend”.

“I would expect the leisure and hospitality industries to continue to create jobs,” he said, although he feared the industry could continue to suffer from labor shortages.

Entrepreneurs looking for low-wage jobs have reported difficulties in finding workers. California’s workforce – people who either have a job or are looking – fell by 8,400 people in October, according to Employment Development Department survey results released Friday.

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