June 21, 2024
Beacon Employment Report | California
Presented by Beacon Economics
Copyright © Beacon Economics LLC
CALIFORNIA EMPLOYMENT EXPANDS AGAIN DESPITE TECH, ENTERTAINMENT INDUSTY SLOWDOWN
State’s Unemployment Rate Remains Highest In Nation; Surge In Unemployment Linked To Minimum Wage Increases
43,700
Job Growth�
California’s labor market expansion hit its 49th month in the latest numbers, with total nonfarm employment in the state growing by a seasonally adjusted 43,700 positions in May. California’s labor market remains strong despite slowdowns in handful of industries including tech and entertainment. April’s gains were also revised to 4,100 in the latest numbers, a 1,100 decrease from the preliminary estimate of 5,200.
Employment growth in California has trailed the nation in recent years. Since February 2020 (the start of the pandemic), total nonfarm employment in the state has grown 2.0% compared to a 4.1% increase nationally. California increased payrolls by 1.2% from May 2023 to May 2024, trailing the 1.8% increase nationally over the same period.
1.2%
Annual Employment Growth
The state’s unemployment rate remains the highest in the nation although it decreased to 5.2% in the latest numbers, a -0.1 percentage-point decline from the previous month. California’s unemployment rate has jumped over the last year, and the newly unemployed are almost entirely younger worker (under age 35). Oddly, initial claims for unemployment insurance have remained stable over this period. Beacon Economics has connected the surge in youth unemployment to the state’s minimum wage hikes. An analysis of that phenomenon can be seen here.
5.2%
Unemployment Rate
California continues to struggle with its labor supply, which fell by -8,100 in May. Since February 2020, the state’s labor force has declined by -253,900 workers, a -1.3% drop. This is being driven largely by the housing shortage and the retirement of aging workers. In addition, the household survey has diverged from the payroll survey in recent years. Total nonfarm employment is up 2.2% over the last two years, according to the payroll survey, while household employment is down 0.3%, over the same period, based on the household survey.
View Seasonally Adjusted Industry Employment Data For California’s 28 MSA’s/MD’s:
The Beacon Employment Report | California is a unique analysis of California’s employment numbers and trends. Each month, we link our own econometric predictions to data released by the U.S. Bureau of Labor Statistics and the California Employment Development Department to identify important changes in employment across industries and regions. The Beacon Employment Report is also one of the few analyses that uses seasonally adjusted numbers, which are critical to revealing accurate trends and insights within data. The analysis is a sample of the kind of research available from Beacon Economics.
The contents of this report are based on information derived from carefully selected sources Beacon Economics believe are reasonable. We do not guarantee its accuracy or completeness and nothing presented here shall be construed to be a representation of such a guarantee.
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