California’s slowing economic expansion was evident in August as the state lost 8,200 net jobs and the unemployment rate rose to 5.1%, from 4.8% a month earlier, according to data released Friday from the state’s Employment Development Department. The drop in employment follows a robust July in which the Golden State gained the most jobs in more than a year: 84,500, revised up from a previous estimate of 82,600. August’s slide back was in large part driven by employers in the leisure and hospitality sector: They cut 12,400 jobs on a seasonally adjusted basis — the largest decrease by any sector in the state. Professional and business services and the public sector also lost jobs. Manufacturing and the trade, transportation and utilities sector, meanwhile, gained jobs.
The pace of hiring slowed in August, while the U.S. unemployment rate edged up.
Nonfarm payrolls rose by a seasonally adjusted 156,000 in August from the prior month, the Labor Department said. The unemployment rate rose to 4.4% from 4.3%, though the level remains historically low. Wages maintained a modest growth rate.
Economists surveyed by The Wall Street Journal had expected 179,000 new jobs and a 4.3% unemployment rate last month.
Workers who lose their job face a variety of hardships while unemployed. But beyond the direct cost of job loss, its associated income loss, workers will tend to make less in their next job as well. This is perhaps not surprising intuitively and is certainly expected by economic theory. Coming from unemployment, a worker is not in a good position to select their optimal job nor to bargain for high wages once they find a job. In addition, unemployment may signal—rightfully or not—that a worker was separated for a reason and is less productive than their prior wage required. By either of these stories, unemployment duration should exacerbate the earnings losses. A worker unemployed longer will be more desperate to take a bad job that comes along and have an even worse bargaining position in it. Long unemployment durations also may signal failed attempts to find employment and be an even worse signal than a relatively short unemployment spell. A longer search time, however, may help the worker find a better match and a higher wage in re-employment. This article will explore empirically earnings losses across unemployment spells and show that, in general, the longer the unemployment duration, the larger the loss.
Swing states that played a key role in electing Donald Trump president have posted some of the biggest declines in unemployment during the early phase of his administration. Six states voted for President Barack Obama, a Democrat, in 2012 and then Mr. Trump, a Republican, in 2016: Ohio, Michigan, Florida, Iowa, Pennsylvania and Wisconsin. The median unemployment rate of those switchover states has fallen far faster than the national median this year, according to an analysis of data released by the Labor Department on Friday. The median rate of those states stood at 3.9% as of July, down from just under 5% in December. By comparison, the national median fell to 4.1% in July from 4.7%.
California’s unemployment rate edged upward to 4.8 percent in July, even as more than 80,000 jobs were added to employer payrolls.
The jobless rate reported Friday by the state’s Employment Development Department moved up from the record-tying low of 4.7 percent seen in both May and June this year.