The Center for Jobs and the Economy has released our initial analysis of the December Employment Report from the California Employment Development Department.
The December job and employment numbers were mixed. Nonfarm jobs (seasonally adjusted) were up 50,700, the lowest monthly total in 2021 since the loss posted at the beginning in January. California’s performance was essentially the same as Texas (50,000) and New York (45,300). The underlying unadjusted number showed a weaker rise of 32,400, although this number was somewhat higher than comparable periods in 2018 and 2019.
The employment numbers were better, showing a seasonally adjusted increase of 116,900. The unadjusted numbers showed a loss of 32,900, still somewhat better performance than the same period in 2018 and 2019.
Full performance over the year indicates a general slowing in the recovery progress. For nonfarm jobs, the strong job numbers in February essentially replaced the second round of losses in January and the previous December. Subsequent progress was dampened by an extended easing of the previous county tier system, followed by an initial upsurge as the state officially “reopened” in June.
The employment numbers have been more consistently positive as workers have turned to self-employment even in the face of AB 5 and starting their own businesses. The two series, however, continue to show a strong disconnect due to continued efforts to adjust the seasonal adjustment formulas to conditions overwhelmed by pandemic factors. The upcoming annual revisions in March will provide more clarity in the numbers overall.
California’s adjusted unemployment rate improved 0.5 point to 6.5%, the strongest improvement since February. Improvement in the rate, however, came from movement within the labor force numbers from unemployed to employed. The labor force movement improved somewhat over the lackluster numbers in the prior two months, but still showed only a 1.9% increase on an annualized basis.
California’s overall recovery remains below the rest of the states, although the December numbers show some closure in the jobs progress. Note that the chart below reflects revisions in the 2021 job numbers and 2017-2021 employment numbers for the US. The revised California numbers will be available in March.
Most parts of the state’s economy remain in the recovery stage. Efforts to resolve the current supply chain disruptions continue to boost strong gains in Transportation & Warehousing, while Professional, Scientific & Professional Services continue their relatively stronger performance throughout the pandemic period. Lower wage employment in Arts, Entertainment & Recreation, Accommodation & Food Services, and Other Services continue to lead the lag, while much higher wage Mining & Logging reflects increasing state policy pressures to shrink these industries in the state.