Los Angeles

The Los Angeles (MD) labor market added 78,100 jobs in August, the latest numbers available, bringing nonfarm employment to 92.8% of February 2020 levels. This marks the seventh straight month of strong employment growth in the region following payroll declines in December 2020 and January 2021, when COVID-19 cases were resurging and public health mandates were re- imposed. Notably, the region’s total labor force contracted by 60,300 workers in the latest numbers and remains 2.0% below pre-pandemic levels.

In the most recent numbers, the Education and Healthcare sector experienced large job gains, adding 7,900 jobs from July to August. This was followed by Professional, Science, and Technical Services (6,100), Leisure and Hospitality (5,300), and Manufacturing (4,000). Government, a sector not affected as badly by the pandemic, led the most recent job gains with 43,800 positions gained.

Although Los Angeles (MD) continues to add jobs, the region has recovered only 57% of the total jobs lost in March and April 2020, the onset of the pandemic. In this respect, Los Angeles (MD) trails or ties other Southern California metros, including the Inland Empire (76%) and San Diego (57%). With more than 40% of pre-pandemic jobs yet to be regained, the trajectory of recovery among different industries has varied significantly. While industries such as Leisure and Hospitality and Other Services have seen strong growth in recent months, they still have a long way to go to recover all the jobs lost following April 2020’s historic decline.

With the state and region hitting vaccination targets, the headwinds that restrained employment growth at the end of 2020 and the beginning of 2021 are slowly, but steadily, disappearing. Los Angeles’ (MD) labor supply will be the biggest restraint on job growth in the coming months, although some factors that were affecting supply, such as school closures, have now been lifted. Given the near-full reopening of the state economy this past summer, Beacon Economics anticipates that Los Angeles (MD) will continue to add to its payrolls over the fall as labor markets settle on new wage and supply equilibriums.

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The pandemic’s impact on the Los Angeles (MD) apartment market has been significant. Apartment demand took a hit last year as buyers and sellers grappled with work from home (WFH) policies and the fact that many workers no longer needed to live near their place of employment. While apartment prices and vacancy rates have stabilized, prices are still lower and vacancy rates higher than pre-pandemic levels.

As apartments became available through natural attrition in 2020, as well as through household consolidation and work from home trends, the performance of the Los Angeles (MD) apartment market was driven by a combination of suppressed demand as well as an uptick in supply. The cost of apartment rent in the region fell 5.4% from the first quarter of 2020 to the second quarter of 2021, a bigger drop compared to the Inland Empire.