The Center for Jobs and the Economy has released our initial analysis of the June Employment Report from the California Employment Development Department. For additional information and data about the California economy visit www.centerforjobs.org/ca.
Highlights for policy makers:
- Mixed Results in July Data
- California Labor Force
- Recovery Progress: CA Employment vs. Other States
- Nonfarm Jobs
- Recovery Progress: CA Nonfarm Jobs vs. Other States
- Nonfarm Jobs by Region
- Unemployment Rates by Region
- Counties with Double-Digit Unemployment
- California MSAs in the 25 Highest Unemployment Rates
- Unemployment Rate by Legislative District
Mixed Results in July Data
The July numbers were generally positive, but again at levels showing the state economy largely running in place. After posting the worst unemployment rate among the states 5 months in a row, California finally notched down to the second worst in July, tying with Illinois in that slot. The total number of unemployed, however, remained above the 1 million mark for the 7th month in a row. Employment while showing a marginal gain of 7,300 for the month still was 88,700 below the near term high posted in May 2023.
Nonfarm jobs again had a strong gain of 21,100, coming in at the third highest level among the states. However, almost all the growth came from jobs in Government, which expanded by 19,200. Healthcare & Social Services, where jobs growth has been heavily reliant on government spending, grew by 7,400. All other private industry jobs contracted by 5,500. While the preliminary seasonally adjusted data shows the state creating 284,400 nonfarm jobs over the year since July 2023, 30.6% were government jobs, 47.7% were in Healthcare & Social Services, and only 21.7% were in the other private industries.
The dampening effect of state policies on private industry jobs growth continues to be seen in the effects of the new $20 an hour minimum wage for fast food chains. Using the seasonally adjusted series available through the St. Lous Federal Reserve Bank Economic Data (FRED), employment in the associated industry grouping, Limited-Service Restaurants and Other Eating Places, grew throughout most of 2023. However, as employers began preparing for the higher labor costs, the number of jobs has since fallen in each month since January through June in 2024 (July not yet available). Compared to the series high in January, jobs in this industry are down 6,300 through June.
California Labor Force
California’s reported unemployment rate (seasonally adjusted) in July was unchanged at 5.2%. The US rate rose 0.2 point to 4.3% as the labor force expanded.
California had the second highest unemployment rate among the states, tying with Illinois.
Employment rose by 7,300 (seasonally adjusted), with the total employment loss since July 2023 at 64,300.
US employment rose by 67,000.
California unemployment edged up by 7,800, while US unemployment rose by 352,000. California unemployment has been above 1 million for the past 7 months in a row.
Recovery Progress: CA Employment vs. Other States
Compared to the pre-pandemic peak in February 2020, California’s sustained weakness in employment recovery remained at 4th lowest among the states and DC.
Nonfarm Jobs
Nonfarm wage and salary jobs rose 21,100 in the preliminary results for July, while the June gains were adjusted downwards by only 1,700
For the US as a whole, nonfarm jobs rose 114,000 in July.
The seasonally adjusted numbers for California showed gains in 8 industries and losses in 10. Increases were led by Government (19,200), Healthcare & Social Assistance (7,400), and Private Educational Services (4,900). Losses were led by Wholesale Trade (-6,200), Manufacturing (-3,100), and Information (-3,000).
Recovery Progress: CA Nonfarm Jobs vs. Other States
California’s monthly job performance in July was the 3rd highest among the states and DC, behind New York with a gain of 41,400 and Florida with 21,800. Texas, which was being hit by Hurricane Beryl in the midst of both the establishment (jobs) and household (employment) surveys, posted a loss of 14,500.
Compared to the pre-pandemic peak, California has now gained a net 398,400 nonfarm jobs, moving into 3rd place just ahead of much smaller North Carolina.
Adjusted for size, California remained at 31st highest, below the US average. Only 3 states and DC remain below their pre-pandemic peaks.
Nonfarm Jobs by Region
By region, job gains were concentrated in Southern California, while the budget-critical Bay Area experienced a loss of 3,400.
Because the data in the table is seasonally adjusted, the numbers should be considered as the total for the counties in each region rather than the regional number. This job series also is not available for all areas in California.
Unemployment Rates by Region
Looking at employment change over the year, the Bay Area continued to lose ground while portions of Southern California and the Central Valley again showed gains.
Unemployment rates (not seasonally adjusted) remain higher in all regions except the Central Coast compared to pre-pandemic February 2020 levels.
Counties with Double-Digit Unemployment
The number of counties with an unemployment rate (not seasonally adjusted) at 10% or more edged down to 3. The unadjusted rates ranged from 3.8% in San Mateo to 18.7% in Imperial.
California MSAs in the 25 Highest Unemployment Rates
10 California MSAs were in the 25 with the highest unemployment rates nationally in June.
Unemployment Rate by Legislative District
The estimated unemployment rates are shown below for the highest and lowest districts. The full data and methodology are available on the Center’s website.