California and Southern California's job market is showing no signs of improvement, with a slowdown in new job growth and a rise in the number of unemployed individuals. This trend contrasts sharply with the overall stronger national job market, raising concerns.

However, certain sectors such as government, public sectors, leisure, education, and health are showing signs of recovery, driving employment growth.

According to the California Employment Development Department (EDD) on the 5th, the number of non-farm jobs in California reached 18,075,400 in July, an increase of 21,000 new jobs compared to June's 18,054,300.

This job growth was attributed to hiring in other sectors offsetting the increase in layoffs in sectors such as Silicon Valley’s information technology (IT) companies.

EDD reported that with the complete lifting of economic lockdown measures due to the COVID-19 pandemic in California, the job market continued to expand, showing slight but consistent job growth in July.

California's job growth of 21,000 in August accounted for 18.5% of the 114,000 new jobs created nationwide, making it the state with the highest job creation among all 50 states. Over the past 12 months, California created a total of 284,400 new jobs.

However, California’s unemployment rate in July stood at 5.2%, maintaining the high level from June. This is 0.5 percentage points higher than the 4.7% recorded in July of the previous year, 2023. The unemployment rate is also 0.9 percentage points higher than the national unemployment rate of 4.3%. Moreover, California's 5.2% unemployment rate in July was the highest among all 50 states, along with Nevada.

During the COVID-19 pandemic, California’s unemployment rate soared to a record high of 16.1% in April 2020, but it has since decreased to one-third of that rate. However, recent trends show a worsening of the situation.

EDD reported that four of the 11 major industries in California saw job increases compared to the previous month. The government and public sectors saw the largest increase, with 19,200 new jobs added compared to the previous month. This was followed by education and health (12,300 jobs), construction (2,700 jobs), and leisure and hospitality (1,800 jobs). On the other hand, the trade and transportation sector saw the largest decrease, with 4,300 fewer jobs compared to the previous month. The manufacturing sector and the information and communication sector also saw job losses of 3,100 and 3,000, respectively.

In July, the number of unemployed individuals in California was 1,008,200, an increase of 7,800 compared to the previous month and 103,800 compared to the same time last year. The total number of unemployment insurance (UI) recipients was 400,294, an increase of 19,171 compared to the previous month but a decrease of 1,451 compared to the same period last year. The number of new UI claims in July was 41,926, down 3,236 from the previous month and 1,827 from the same period last year.

Employment conditions in Southern California, including LA County and Orange County (OC), are also not favorable.

In July, LA County's unemployment rate was 5.5%, up 0.2 percentage points from the final figure of 5.3% in June and 0.6 percentage points higher than 4.9% from the same period last year. The number of non-farm jobs in LA County was recorded at 4,558,000, a decrease of 30,800 compared to the previous month. The number of unemployed individuals increased by 9,000 compared to the previous month, reaching 275,000.

Among the 11 major industries in LA County, the leisure and hospitality sector saw the largest increase in jobs, adding 3,600 compared to the previous month. This was followed by other sectors (1,800 jobs) and the trade and transportation sector (1,500 jobs). However, the government and public sectors saw the largest decrease, with a loss of 35,000 jobs.

In July, Orange County’s (OC) unemployment rate was 4.4%, an increase of 0.4 percentage points from the final figure of 4.0% in June. This is also 0.8 percentage points higher than the 3.6% recorded during the same period last year. Analysts noted that OC’s unemployment rate, which had once dropped to the 2% range, is now worsening rapidly. The number of non-farm jobs in OC was recorded at 1,704,900, a decrease of 2,100 compared to the previous month.

Among the 11 major industries in OC, the professional and business services sector saw the largest increase in jobs, with 3,600 added compared to the previous month. This was followed by the leisure and hospitality sector, which added 1,100 jobs.

Meanwhile, the national unemployment rate in July stood at 4.3%, an increase of 0.2 percentage points from June’s 4.1%, and an increase of 0.8 percentage points from 3.5% recorded in July 2023.

By Reporter Hwandong Cho

<Hwandong Cho>