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Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

California adds nearly 50% of new US jobs in August

The Golden State has now seen six-figure job growth five times in 2021 and has created nearly 775,000 jobs this year.

SACRAMENTO, Calif. (CN) — California’s unemployment rate remains stubbornly high at 7.5% but its months-long hiring spree continues as the state accounted for nearly half of the nation's new jobs in August.

Buoyed by big gains in the government and leisure and hospitality sectors, California employers added 104,000 new jobs —more than any state — and dropped the state’s jobless rate a tick from July’s figure of 7.6%. California continues to add jobs at an impressive pace, averaging 110,000 new jobs per month since February.

After California, Texas and New York saw the largest gains with 39,000 and 23,000 new nonfarm jobs respectively.

Governor Gavin Newsom called Friday’s report “promising progress” for the state which lost more jobs at the outset of the pandemic than any other.  

“California continues to lead the nation’s economic recovery, creating 44% of the nation’s new jobs in August and ranking third in the nation in rate of job growth this year,” the Democratic governor said in a statement.

Hiring slowed nationwide as U.S. employers added only 235,000 jobs, but California saw gains in nine of 11 industry sectors. State and local governments reported 46,000 new jobs, followed by leisure and hospitality (33,000), professional and business services (14,000) and other services (8,400). Only the trade, transportation and utilities and education and health services sectors cut jobs in August.

The long-awaited reopening of the state’s schools drove the August numbers, as public school jobs are under the umbrella of the government sector. Overall, government hirings accounted for 42% of the state’s new jobs.

Job creation centered primarily in the state’s most populous region as Los Angeles County contributed 53% of new hirings. Meanwhile the nine-county San Francisco Bay Area kicked in an impressive 20,000 new jobs as well.

The Golden State has now seen six-figure job growth five times in 2021 and has created nearly 775,000 jobs this year. In addition, the state has recovered 62% of the 2.7 million jobs erased during the first two months of the Covid-19 pandemic.

Business leaders hailed the report but advised looking to the past and learning from it.

“Today’s jobs report continues to show California, which lost the most jobs during the pandemic, is regaining jobs back at a healthy pace, even though we have the second-highest unemployment rate in the nation," Rob Lapsely, president of the California Business Roundtable, said in a statement. "What's more, job recovery is concentrated in high-wage and low-wage jobs, with little recovery in middle-wage jobs. We need to learn from our slow and prolonged Great Recession recovery and promote additional policies that encourage investment in middle-wage job growth and address the cost-of-living crisis."

Despite the notable stretch of job creation in the Golden State over the last eight months, only Nevada is experiencing higher levels of unemployment. At 7.5%, California’s jobless rate continues to outpace the national rate at 5.2%.   

Other states above the national mark include New York (7.4%), Connecticut (7.2%), Illinois (7%), Hawaii (7%), Pennsylvania (6.4%) and Texas (5.9%).

Economist Sung Won Sohn said that while California remains the “workhorse” of the country’s labor market, the pandemic and delta variant are still threatening to reverse the state’s economic trajectory. He said there’s still hesitancy among educators and employees in other industries about returning to work and noted people are again canceling vacations and travel plans because of the latest wave of infections.   

“Meetings are being canceled or postponed. Air travel has slowed. People are cautious about going to public places,” said the Loyola Marymount University professor in an email. “Another full-scale economic shutdown is highly unlikely, but future economic growth could slow, as long as the new virus remains a serious concern. The cloud cover has not gone away.”

According to data derived from the pair of federal surveys, California has far more unemployed (1.4 million) than any other state. Next is Texas (835,000), New York (691,000) and Florida (529,000).

Since March 2020, California has paid out $172 billion in unemployment benefits and has been forced to borrow nearly $20 billion from the federal government to cover the staggering costs. California is one of 10 states to pull from the Federal Unemployment Account and its tab represents 44% of the total outstanding loans.

The California for Jobs and the Economy predicts the state’s eventual unemployment debt could peak as high as $30 billion by 2023. During the Great Recession, California was also heavily reliant on the fund and it raised employment taxes on businesses to cover the $11 billion it was floated.  

Of California’s major counties, Los Angeles has the highest unemployment rate at 9.7%, though it’s down from 10.2% in July. Rates in other counties include San Diego (6.6%), San Francisco (5%), Orange (6%), Sacramento (7%) and Fresno (8.8%). The next monthly jobs update is scheduled for Oct. 22.

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Categories / Economy, Regional

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