Beacon Employment Report

Welcome to the Beacon Employment Report, 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.

California’s labor market recovery continued in August, with total nonfarm employment in the state expanding by 101,900 positions, according to an analysis released jointly by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development.

One ostensibly positive sign is that the state’s unemployment rate fell to 11.4% in August, a 2.1-percentage-point decline relative to July, although this remains a far cry from the 3.9% rate enjoyed one year ago. Moreover, the unemployment rate fell for the wrong reasons. The month-over-month decline was aided by a decline in the state’s labor force, which contracted by 117,100 during the month, the second consecutive monthly decrease. From a year-over-year perspective, the state’s labor force has declined by 3.7%, a steeper drop relative to the 1.9% decline in the nation overall.

Since February, the number of people looking for work in the state has fallen by 807, 000, a sign that many workers have become discouraged and have stopped actively looking for employment.

A possibly better sign is that 50% of the state’s unemployed workers report their layoff as temporary, and that they should be returning to work in the coming months. Notably, in April more than 70% of the state’s workers described their unemployment in these terms.