The California and Southern California job markets are showing signs of stagnation, with new job creation slowing down and unemployment increasing. This trend contrasts sharply with the still-healthy national job market, raising concerns.

However, government, public sectors, leisure, education, and healthcare industries have led the recovery, showing continued job growth.

According to the California Employment Development Department (EDD), as of July, California’s nonfarm employment totaled 18,091,000 jobs, an increase of just 6,800 new jobs from June’s 18,084,200 jobs.

While layoffs have increased significantly in Silicon Valley's IT sector, hiring in other industries has partially offset this loss.

The EDD noted that, although COVID-19 restrictions have been lifted, and job growth has continued in July, the expansion in the labor market remains modest. In August, California's unemployment rate rose to 5.3%, up from 5.2% in July, and 0.5% higher than the 4.8% recorded in August 2023. This unemployment rate is 1.1% higher than the national unemployment rate of 4.2% in August.

California’s 5.3% unemployment rate was the second-highest in the nation after Nevada, which recorded 5.5%.

During the peak of the COVID-19 pandemic in April 2020, California’s unemployment rate soared to a record 16.1%. Although it has since dropped to about a third of that level, it has been worsening recently.

Over the past year, California created 287,100 new jobs, an average of 23,925 per month, representing a 1.6% growth rate, which is slightly higher than the national average of 1.5%. However, employment experts argue that this is a weak figure, considering California’s labor market has over 18 million jobs.

The EDD reported that five of California's 11 major industries saw job gains in August. The leisure and hospitality sector added the most jobs, with 6,800 new positions, followed by education and healthcare (4,900), other services (3,900), professional and business services (3,800), and trade and transportation (2,900).

Conversely, the information and communication sector saw the biggest job losses, with 5,100 fewer positions. Manufacturing lost 4,700 jobs, construction lost 3,300 jobs, and government and public sectors lost 2,200 jobs.

In August, the number of unemployed Californians was 1.02 million, an increase of 11,300 from the previous month and 83,900 more than a year ago.

Total unemployment insurance (UI) beneficiaries were 382,640 in August, down 17,654 from the previous month and 12,117 from the same period last year. The number of new UI claims in August was 39,023, down 2,903 from the previous month but up 1,049 compared to the same time last year.

The employment situation in Southern California, including Los Angeles County and Orange County, also worsened in August. In Los Angeles County, the unemployment rate rose to 5.6%, up 0.1% from the final July figure of 5.5%, and up 0.5% from 5.1% in August 2023. The number of nonfarm jobs in Los Angeles County increased by 13,700 from the previous month to 4,572,900. The number of unemployed rose by 10,000 to 285,000.

In Los Angeles County, the government and public sector led job growth in August, adding 15,500 jobs compared to the previous month. The education and healthcare sectors gained 2,600 jobs, trade and transportation added 600, construction added 300, and leisure and hospitality added 300 jobs. However, the information and communication sector saw the largest loss, shedding 3,700 jobs.

In Orange County, the unemployment rate rose to 4.5% in August, up 0.1% from July’s final figure of 4.4%, and 0.5% higher than the 4.0% recorded in August 2023. The unemployment rate in Orange County, which once fell to the 2% range, has been worsening rapidly. Nonfarm employment in Orange County decreased by 3,800 jobs from the previous month to 1,699,800.

In August, the construction and education and healthcare sectors each added 1,000 jobs in Orange County. However, the government and public sector lost 1,500 jobs, while leisure and hospitality (1,000 jobs), manufacturing (700 jobs), and professional and business services (600 jobs) also saw declines.

Meanwhile, the national unemployment rate in August was 4.2%, a decrease of 0.1% from July’s 4.3%, but up 0.4% from 3.8% in August 2023.



<Hwandong Cho>