March 27, 2020
Beacon Employment Report
Presented by Beacon Economics
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 STRONG PRE COVID-19 JOB GROWTH BETTER POSITIONS STATE FOR RECOVERY
Pre Coronavirus: CA Unemployment Rate Maintains Its Record Low
The latest employment figures released by the California EDD reiterate one piece of good news: California entered the COVID-19 crisis from a strong position. Together with federal stimulus, and a return to some degree of normalcy within a couple of months, the economic hardship could be somewhat temporary, with consumption deferred to a later period, according to analysis released jointly by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development. However, there could be longer-term hardship if this unprecedented draw down in consumption endures into the summer.
“We have taken a jump into unknown territory. Over the next few weeks, the number of workers laid off in California will reach unprecedented levels,” said Taner Osman, a Research Manger at Beacon Economics and the UCR Center for Forecasting. “The hope is that stimulus measures will ease the short-term pain felt by workers, and that containment efforts will enable the economy to return to something like full capacity as the summer proceeds. At present, we can take some comfort in the fact that the state’s economy entered this downturn from a position of unparalleled strength.”
The latest figures reveal that employment in the state grew by 29,000 jobs in February. Since February of last year, California has added 269,000 jobs, which is equivalent to a 1.6% year-over-year increase, matching the nation’s growth rate of 1.6%. The effect of COVID-19, however, does not register in the current job’s release and will not appear in the numbers in a meaningful way until data for April are available.
California’s unemployment rate held steady at 3.9% in February, maintaining its record low. The state’s labor force continues to expand, albeit slowly, growing by 6,400 February. Year-over-year growth in California’s labor force now stands at 0.7%. A lack of housing continues to be the main constraint for work force growth in the state.