California unemployment rate continues to climb

SACRAMENTO, Calif. (CN) —California's unemployment rate has continued its slow rise this year, reaching 5.3% in February.

The upward trend has been ongoing for months. It hit 5.1% in December, a 1% increase over the prior year.

In January, it crept up to 5.2%. It then increased another 0.1% the following month, according to a Friday release from the state’s Employment Development Department.

In total numbers, there were 1,027,000 Californians without jobs in February. That’s an increase of 13,100 from January, and a rise of 165,400 when compared to February 2023. A sample week in February showed 425,760 people certified for unemployment insurance benefits, compared to 392,541 people in January and 380,768 in February 2023.

State officials processed 41,260 initial unemployment benefit claims during last month’s sample week. That was a drop of 5,936 claims from January, but an increase of 677 from a year ago.

Colusa County had the highest unemployment rate, at 20.4%. It was followed by Imperial County at 17.2% and Tulare County at 12.3%. Imperial County's unemployment rate has dropped about a percentage point since the year began, though rates in Colusa and Tulare counties have climbed.

San Mateo County had the lowest unemployment rate, at 3.7%. San Francisco County came in second at 3.8%, while Marin County was third at 4%.

California had 18,321,900 employed residents in February. That’s a drop of 20,100 people from January, and a decrease of 82,600 from February 2023.

There were 17,971,100 non-farm jobs in California in February — a drop of 3,400 from the prior month. Year-over-year, that's a 1% increase of 179,700 jobs. Nationwide, non-farm jobs grew by 2,748,000, a 1.8% increase.

California lost 2,100 farm jobs in February, making the new total 425,000. Still, there are 26,100 more farm jobs now than a year ago.  

Out of the state’s 11 industry sectors, four of them gained jobs last month.

Private education and health services saw the biggest increase, with 15,400 jobs. That can be attributed to health practitioners like acupuncturists and dieticians. Home health care services and individual and family services also helped with the job increase.

Job losses occurred in construction, with that sector losing 9,600 positions. Atmospheric river storms that hit California in February caused disruptions to the industry. Trade, transportation and utilities also saw losses of 7,300 jobs, as the country saw less discretionary spending and demand from consumers.

The rising unemployment rate comes as Democratic Governor Gavin Newsom and state lawmakers deal with a massive budget deficit, estimated at somewhere between $38 billion and $73 billion.

One reason for this large difference in the estimates is that various state offices expect different revenue levels. Newsom has said he’s optimistic about revenues, while the Legislative Analyst’s Office isn’t as bullish. In fact, the analyst recently revised his estimated deficit from $58 billion to $73 billion, saying that revenues weren’t meeting expectations.

The analyst’s office has pointed to delayed tax receipts from last year, tighter monetary policy and a slowdown in California’s economy as contributors to the deficit, as well as lower income for the state’s highest earners.

This week, Newsom and legislative leaders announced some $12 billion to $18 billion in “budget solutions,” though they provided little detail.

The announcement indicated that lawmakers would act next month to reduce the shortfall. The Legislature is in recess for the last week of this month. The state budget must be passed by June 15.

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