CA’s jobless rate falls to 6.9%, but new hiring slows down

California payrolls added 47,500 nonfarm workers in November compared with October’s 96,800 new hires, according to the state Employment Development Department. The November new hires accounted for 22% of the U.S.’s 210,000 jobs for the month. In California, November’s unemployment rate of 6.9% improved from October’s 7.3%.

The U.S. unemployment rate fell to 4.2% in November versus October’s 4.6%.

The employment story for California in November is mixed.

While the drop in the jobless rate is welcome, the hiring slowdown is not. It is unclear if the latter is a blip on the radar screen or, alternately, the beginning of a trend. Crucially, the November employment data does not reflect the spread of the highly transmissible Omicron coronavirus variant that threatens to reduce employment across the Golden State.

“The largest gains were in the strongest pre-pandemic sectors, tech-related professional services and health care.” — Jeffrey Michael

In the meantime, California has been digging out of a deep trough of job losses from early 2020. According to the state’s Employment Development Department, “the state has now regained 1,889,000, or nearly 70 percent, of the 2,714,800 jobs that were lost in March and April 2020 due to the COVID-19 pandemic.” California’s unemployment rate spiked from 4.3% to 16% when Gov. Newsom closed schools and businesses to slow the spread of the deadly virus.

Professional and business services job growth led the way with 18,800 jobs added in November after October’s 39,500 new hires. Leisure and hospitality employers added 6,900 jobs in November compared with October’s 21,500 new hires. Construction was the only one of the 11 industry sectors to lose employment in November, shedding 1,700 jobs due to decreases in specialty trade contractors, according to the EDD. In contrast, government employment was the only sector to experience job losses in October, shedding 4,000 jobs.

Professor Jeffrey Michael is the Director of Public Policy Programs and Professor of Public Policy at Pacific McGeorge School of Law. “The most notable positive is that the leading sectors with job growth now are much more than a bounce back in the pandemic-devastated area of leisure and hospitality,” according to Professor Michael.  “The largest gains were in the strongest pre-pandemic sectors, tech-related professional services and health care.”

Nationally, California had the highest unemployment rate of the 50 states in November, also the case in October.

“However, recovery in hospitality and services has slowed down far short of a full recovery and a winter COVID surge bodes poorly for recovery in the near term.  This is the biggest contribution to an unemployment rate that, although improving, remains too high.”

California’s 58 counties had divergent jobless rates in November. Take the San Francisco Bay Area. There, Marin, San Francisco and San Mateo counties had unemployment rates of 2.9%, 3.3% and 3.1%, respectively, in November.

Meanwhile, Imperial County reported a 15.5% unemployment rate. Colusa County clocked in with a jobless rate of 10.3%. Los Angeles County, with the state’s biggest labor force of 5 million, had a jobless rate of 7.1% in November. Kern and Kings counties had 7.4% and 7.3% unemployment rates, respectively, in November.

California created nearly 22 percent of the nation’s jobs in November.

Nationally, California had the highest unemployment rate of the 50 states in November, also the case in October. Gov. Gavin Newsom hit a glass half-full note after the release of the November employment data.

“Since February, California has created nearly 1 million jobs,” he said in a statement, “an unprecedented achievement for the state’s economic recovery. While the state continues to see a robust recovery, creating nearly 22 percent of the nation’s jobs in November and the largest unemployment rate decrease since February, there’s still more work to be done getting folks back to work and supporting those hardest-hit by the pandemic.”

Despite the creation of about 1 million new nonfarm payroll jobs since February 2021, there were 1,321,300 unemployed Californians in November, down from 61,900 over the month and 299,400 versus November 2020. On average since February 2021, California has gained roughly 97,720 new hires per month as the overall number of jobless Californians declines.

A factor relative to employers’ future hiring in the Golden State is that their payroll expenses are going up in the new year. The California minimum wage increases to $15 an hour on January 1, 2022.  Employers with 25 employees or less have one more year to comply with the $15 hourly wage, and can pay $14 an hour throughout 2022.
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Editor’s Note: Seth Sandronsky reports regularly for Capitol Weekly.  Contact him at sethsandronsky@gmail.com.