SACRAMENTO, Calif. (CN) — The prolonged revival of the leisure and hospitality sector continues to spur California’s economic recovery as the state added more jobs in June than any other except Florida.
California gained a robust 73,500 payroll jobs last month, but signs of a slowdown are emerging as its 7.7% unemployment rate remains stubbornly above the national 5.9% average.
The Golden State has now regained 54% of the jobs lost during the outset of the pandemic, compared to 70% nationwide. While California’s jobless rate is nearly half of the 14.1% registered in June 2020, it owns the fifth highest unemployment figure in the country.
Since February California has added nearly 560,000 new jobs, an average of 111,000 per month. Prior to the pandemic, the state’s record for new jobs in a month was 98,000.
For the fifth straight month, the state’s hard-hit leisure and hospitality industry led the way in June with 44,000 new jobs. In total, eight of 11 sectors reported job gains.
Governor Gavin Newsom applauded Friday’s jobs report, boasting it shows the state “continues to lead the nation’s recovery.”
“These are promising figures that represent paychecks for Californians, but we still have a long way to go and refuse to take anything for granted,” Newsom said in a statement.
Others, like Loyola Marymount University economist Sung Won Sohn, were less impressed. He called June’s job gains “moderate” and noted restaurants and small businesses continue to struggle with debt and an insufficient labor pool.
“Work is there but workers are not,” Sohn said in an email. “Even though labor force did increase for the month, it is still lower than it was back in February.”
Even as pandemic restrictions were mostly lifted in May, allowing bars and the tourism industry to fully reopen, California’s workforce shrunk by 32,000. Sohn and other economists said businesses were having a difficult time filling low-wage positions due to lingering Covid-19 fears and additional unemployment benefits.
But in a welcomed reversal, the number of Californians holding or looking for jobs in June ticked up 35,000, bringing the workforce to 18,898,000.
According to data derived from a pair of federal surveys, California has far more unemployed (1.4 million) than any other state. Next is Texas (908,000), New York (726,000) and Florida (523,000).
As for urban regions, the Los Angeles-Long Beach-Glendale area reported 542,000 unemployed residents followed by New York City (431,000), Chicago-Naperville-Arlington Heights (299,000) and Seattle-Bellevue-Everett (90,000).
Friday’s update comes two weeks after the U.S. Labor Department announced American employers exceeded expectations in June by adding a combined 850,000 jobs.
“Our economy is on the move and we have Covid on the run,” Biden claimed.
Yet Biden’s proclamation appears to have been premature as just two weeks later California and every other state are seeing increases in new Covid-19 cases.
The rise of Delta variant cases and stagnating vaccination rates are paving the way for the potential return of mandatory masks and other familiar pandemic restrictions, at least in California.
Beating state officials to the punch, Los Angeles County officials on Thursday announced the nation’s most populous county would reinstate indoor mask mandates this weekend. In addition, other California counties like San Francisco and Sacramento are urging residents to again wear masks indoors.
Professor Sohn reiterated the resurgent virus could undo the progress California made this spring.
“Unless the infection is under control, more economic pain could be ahead of us,” he said.
Meanwhile, Gov. Newsom lifted most pandemic restrictions over a month ago but the pace of new unemployment benefit claims has hardly slowed. Since March 2020, the state has dished out over $158 billion in benefits, including an estimated $31 billion to fraudsters.
Statewide, unemployment is over 10% in seven counties, highlighted by Los Angeles at 10.5%. Rates in other major counties include San Diego (7%), San Francisco (5.4%), Orange (6.4%), Sacramento (7.4%) and Fresno (9.4%).
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