Economist: As CA and NV Job Markets Recover, Data Still ‘Noisy’

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New data released this week shows California and Nevada’s respective job markets continued their slow and steady recoveries in July 2020 as the national economy continues climbing out of a recession caused by the COVID-19 pandemic.

Many experts think the recession took place from approximately February – May, yet others think the economy may have floundered in recession into late July but aren’t completely sure.

“The recovery momentum that slowed a bit in July was expected with some of the rollbacks on reopening policies in many areas,” said Robert Eyler, economist at Sonoma State University and board member of Redwood CU. “We should still expect noisy economic and jobs data right now because COVID-19 cases are still rising in many areas and there is no vaccine. Any new outbreak makes policymakers nervous, and then makes businesses nervous to re-hire if uncertainty remains. The remainder of this year will still be recession-like at the very least.”

The following are the latest figures released by the California Employment Development Department (EDD) and the Nevada Employment, Training and Rehabilitation Department (DETR).

California’s July 2020 Employment Numbers
The California report shows the state’s unemployment rate falling to 13.3 percent in July (from 14.9 percent in June). Employers added 140,400 non-farm monthly payroll jobs in July — one month after record-high monthly job gains of 542,500 in June (yet record losses experienced in March and April).

  • California has now regained nearly one-third (31 percent) of the 2.62 million jobs lost during March and April.
  • Non-farm jobs now total nearly 15.8 million. However, the total number of Californians holding jobs (both non-farm and agriculture related) was almost 16.3 million — down 2.3 million from “total” employment this time last year.
  • Total non-farm jobs decreased by 1.64 million (nearly 10 percent) from July 2019 to July 2020 compared to a U.S. annual loss of 7.5 percent.
  • Nine of California’s 11 industry sectors gained jobs last month. Trade/transportation/utilities (40,900) saw the largest job gain. The growth in government (36,000) was due to gains in state government.
  • Losses in construction (-14,800) were largely due to weak hiring in residential construction despite hiring in non-residential construction being strong.
  • The number of unemployed Californians was 2.51 million, a decrease of approximately 321,000 over the month, but up by 1.74 million compared to last year.

Nevada’s July 2020 Employment Numbers
The Nevada report shows employment in Nevada is up 14,800 over the month, but dropped 138,700 over the year. The state’s unemployment rate stands at 14 percent (down 2 percent points from June) and up 10.1 percent compared to July of last year.

Nevada’s unemployment insurance claims increased by 18,839 over the month and 56,826 over the year — 39.4 percent and 575.6 percent, respectively. The 12-month average level of initial claims continues to trend near 10,000.

The state added jobs for the third straight month in July, although at a slower pace than May and June.

  • Total employment rose by 1.2 percent over the month, nearly the same as the U.S. growth rate (1.3 percent).
  • The professional and business services sector added the most jobs (3,900) over the month, as well as trade/transportation/utilities and education/health services.
  • Leisure and hospitality (-15.9 percent) and “other” services (-16.6 percent) are down the most year-over-year.
  • Nevada’s Unemployment Insurance Trust Fund, which once stood at $2 billion earlier this year, held a balance of $444.8 million as of Aug. 8. With current weekly benefit payments averaging more than $100 million per week and little indication that the state will see significant economic improvement in the near team, it is likely the fund will begin borrowing funds sometime in September. Ten states have already needed to borrow from the federal government to support benefit payments, with another eight having advanced authorization to borrow in August.

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