For the second straight month the state led the nation with over 100,000 new jobs as workers appear eager to finally rejoin the workforce.
SACRAMENTO, Calif. (CN) — Awakening slowly but surely after a harsh winter of business shutdowns and layoffs, California added more jobs than any other state in March and dropped its unemployment rate to a pandemic-low 8.3%.
Spurred by loosened business restrictions in all major counties, employers added nearly 120,000 jobs — marking the second-consecutive month of six-figure job growth. The hospitality and leisure industry led the way again, reporting 42,000 new jobs after adding a staggering 102,000 in February.
California’s jobless rate has now decreased three straight months but remains stubbornly above the nationwide mark of 6%. Furthermore, the latest estimate from the federal government is nearly 4 percentage points higher than it was in March 2020 and more than 1.5 million Californians remain without jobs.
But after consecutive months of noteworthy job gains and millions of residents already fully vaccinated, experts say the “stars are aligned” for California — once the epicenter of the country’s Covid-19 crisis — to make a comeback.
“This healthy job number heralds the beginning of the end of the pandemic,” said Loyola Marymount University economist Sung Won Sohn in a statement. “The vaccines are working, pointing to herd immunity sometime later this year.”
A wave of hirings by restaurants, bars and the entertainment industry accounted for 35% of the state’s new nonfarm jobs. The industry particularly flourished in urban counties, making up 51% of new jobs in San Diego, 42% in San Francisco and 39% in Los Angeles.
Following leisure and hospitality, the trade, transportation and utilities industry saw major gains (32,000), as did professional and businesses services (22,000). Of the 11 major industries, 10 added jobs while the financial activities sector saw the lone decrease.
Sohn said the range of industries reporting new jobs shows Californians are finally feeling safe enough to return to the workforce due to dropping infection rates and better access to vaccines.
As of Friday, none of the state’s 58 counties were in the most restrictive tier of the state’s reopening framework. This week, California expanded vaccine eligibility to anyone over the age of 16.
Other positive indicators emerging in the Golden State include a dramatic decrease in new unemployment claims in the last week.
For the week of April 10, new claims dropped 52% compared to the previous week, mirroring the nationwide trend. Nonetheless, the state’s Employment Development Department continues to fail jobless residents with a backlog of over 1 million pending claims. California has now paid over $137 billion in unemployment benefits during the pandemic, with an estimated $31 billion going to fraudulent claims.
State officials celebrated Friday’s positive jobs report, calling the growth within the leisure and hospitality industry particularly encouraging.
“Today’s jobs report is another marker of how far we’ve come together — and of how much work we still have to do,” said California Labor Secretary Julie A. Su and one of Newsom’s top economic advisors Dee Dee Myers in a joint statement. “With vaccine eligibility now expanded to Californians 16 and older, our safe reopening and strong recovery will require an ongoing commitment to vaccine access and to a safe workplace for everyone, as more and more Californians get back to work.”
Governor Gavin Newsom said the numbers show California is “roaring back.”
“California’s economic recovery depends on bringing back the businesses and jobs we’ve lost over the past year. That’s why today’s jobs report, which showed that California added 119,600 jobs in March, is so encouraging — especially following February’s report showing an additional 156,100 new jobs created, which was 41% of all new jobs created nationwide,” Newsom said in a statement. “We still have a long way to go, but with over 24 million shots in arms and more kids getting back into classrooms every day, this is the steady progress that we need to bring California roaring back.”
The spike in restaurant and entertainment jobs has clearly driven California’s growth the last several months, but the industry has a long way to go according to Jeffrey Clemens, economics professor at University of California, San Diego.
“Despite experiencing job growth of roughly 11% from January to March, the industry remains severely depressed. Employment in the leisure and hospitality sector remains roughly 30% below its level from a year ago,” Clemens noted.
California’s unemployment picture has improved dramatically since topping out at over 16% last spring, but March’s 8.3% mark is worse than all states except Hawaii (9%) and New York (8.5%). Other states with 8% unemployment include Connecticut, New Mexico and Nevada.
Statewide unemployment dropped marginally in March, yet nearly a dozen counties continue to register double-digit jobless rates.
Los Angeles County’s rate stayed at 10.9%, the only mostly urban county above 10%. The rest include rural counties like Colusa, Imperial, Kern, Kings, Monterey and Tulare.
The estimated unemployment percentages come from a pair of federal surveys with sample sizes of over 200,000 combined businesses, government agencies and households. The next update is scheduled for release on May 21.
Looking ahead, Sohn says California’s ability to fully recover the nearly 3 million jobs lost during the pandemic could depend on whether the growing list of Covid-19 variants cause another spike. The state has recouped an estimated 44% of the lost jobs, but both experts warn it could take years to return to the pre-pandemic peak of 17.4 million total jobs.
Clemons agrees. “Employment would need to grow at the March and February rates for nearly a full year to return to pre-pandemic levels,” he said.