July 17, 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.
JUNE BRINGS LARGEST MONTHLY JOB INCREASE ON RECORD AS HEALTH MANDATES EASED
Good News Tempered: Resurging Virus Expected to Drag Down July and August Numbers
In June, as public health mandates to contain the spread of the novel coronavirus were eased, California saw the largest month-over-month job increase on record, with the addition of 558,200 positions, according to an analysis released jointly by Beacon Economics and the UCR School of Business Center for Economic Forecasting and Development.
Any exuberance should be tempered, however, since there are still roughly two million fewer jobs in the state than at the peak prior to the pandemic. Furthermore, the resurging spread of the virus in the state has led Governor Newsom to reimplement many business closures. A stable and ongoing economic recovery cannot occur until the virus is contained in the state and the nation, according to the analysis.
“Despite June’s strong numbers, we’re unlikely to see the labor market’s recovery continue at such a pace,” said Taner Osman, Research Manager at Beacon Economics and the UCR Center for Forecasting. “The number of jobs added will likely represent the high mark until the virus in the state is contained. The strongest job gains were seen in Leisure and Hospitality, and these are the very sectors that will be hit the hardest by health-mandated business closures.”
In June, year-over-year employment growth in California stood at -10.0%, a decline of 1.7 million positions, the third largest annual decline on record, only trumped by the figures in April and May. The state fared worse than the nation, where nonfarm employment declined by 8.6% over the same period.
From June 2019 to June 2020, 2.1 million workers were added to the state’s unemployment ranks, which means in June, the unemployment rate stood at 14.9%, a relatively modest decline from the 16.3% rate recorded in May. California’s June unemployment rate is higher than the national figure of 11.1%. The number of unemployed Californian’s is over three and half times the level seen one year earlier, at 2,831,031.
On a positive note, the state’s labor force surged by 441,200 people in June, as encouraged workers rejoined the labor force. That said, state’s labor force has declined by 433,000 over the past year, although the strong month cut the pandemic declines by just over half.