CA Job Growth Reverses Course; NV Continues Slow Slog

Employee working from home

California’s job market reversed course in December for the “wrong reasons” as it continued its recovery, and Nevada’s employment scene was still nearly stagnant. While both states’ economies have recuperated differently from the COVID-19 recession, today their pace of labor markets seem similar: just trudging along.

If California’s unemployment rate had increased last month due to more individuals re-joining the labor force (pool of adults and teenagers willing/able to work), that’s a good reason. But it didn’t.

Instead, California’s unemployment rate rose for the first time in eight months (April 2020) as employers cut jobs due to a variety of ongoing local and state COVID-19 business restrictions. Most job cuts were in the leisure and hospitality industry, with several from the food services/accommodation occupational sub-category.

"These changes suggest that the pain in hotels, restaurants, and other places and businesses where people gather and to which they travel saw another setback," said Robert Eyler, economist at Sonoma State University and board member of Redwood CU. "The category encompassing hair salons, nail salons, fitness centers and similar places experienced even more lost jobs. A third round of fiscal stimulus from Congress and the new presidential administration will not solve this issue. We need a true trended recovery."

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

California’s December 2020 Employment Numbers
The California report shows the state’s unemployment rate rising to 9 percent in December (from a “readjusted” 8.1 percent in November). Employers shed -52,200 non-farm monthly payroll jobs in December:

  • California has now regained 44 percent (or 1.15 million jobs) of the approximate 2.62 million jobs lost during March and April of 2020.
  • Non-farm company payroll jobs now total more than 16.1 million. However, the total number of Californians holding jobs (both non-farm and agriculture related) was nearly 17.2 million, which is down 1.47 million from the combined “total” employment this time last year.
  • Total non-farm jobs decreased by 1.41 million (-8 percent) from December 2019 to December 2020 compared to a U.S. annual loss of -6.2 percent.
  • Six of California’s 11 industry sectors gained jobs last month. Construction had the largest monthly increase (31,600) thanks to strong gains in the specialty-trade-contractors and construction-of-buildings categories.
  • The professional and business services sector had the second-largest monthly increase (29,600) due to large gains in the accounting/tax preparation and bookkeeping categories, as well as management, scientific, and technical consulting areas.
  • Leisure and hospitality suffered the largest monthly loss (-117,000) largely due to severe losses in the accommodation and food services category, which accounted for 83 percent of the industry sector’s overall loss.

Nevada’s December 2020 Employment Numbers
The Nevada report shows employment in Nevada is up 8,200 jobs in December 2020, but it's still down by 101,300 jobs over the past 12 months (compared to December 2019) — a large gap that continues closing very slowly. The state’s December unemployment rate stands at 9.2 percent, down from a “readjusted” 10.4 percent in November but up from 3.7 percent compared to December of last year.

As the state added jobs for the eighth consecutive month in December, Nevada’s labor market continued shifting from a rapid policy-driven rebound to a more traditional recovery:

  • Total employment has regained 65 percent of the 287,300 jobs lost from February to April of 2020 (recovering 187,800 jobs so far), and the unemployment rate has fallen sharply since it reached a record high of 30 percent in spring of 2020. Total employment is now at 1.33 million jobs (versus 1.43 million jobs pre-pandemic in early 2020).
  • After a strong start to its initial employment recovery in summer of 2020 when a large number of businesses were simultaneously able to reopen, the state has been stuck in a slower phase of recovery over the past six months.
  • Among private sector industries in December, only the mining, logging, and financial activities industries have seen increases in employment since the year-ago period.
  • In contrast, the leisure/hospitality and other personal service industries remain particularly impacted by the COVID-19 pandemic and business restrictions.
  • While December’s 9.2 percent unemployment rate is less than one-third of its record high of 30.1 percent in April 2020, the most recent labor force participation rate (pool of adults and teenagers willing and able to work) fell below 60 percent for the first time since May 2020. A growing number of individuals are neither working nor looking for work.

January: CA and NV ‘Household Pulse Survey’
Survey results from Jan. 6 show that the percentage of adults in California who expected someone in their household to experience a loss in employment income over the next four weeks was 42 percent, increasing from 39 percent the month prior (and ranging between 42 – 46 percent from April to July of 2020).

Nevada’s Jan. 6 household response came in at 39 percent, decreasing from 45 percent the month prior (and ranging between 40 – 48 percent from April to July of 2020).

The weekly data is from the U.S. Census “Household Pulse Survey.” Although the survey is highly subjective to workers’ immediate feelings and emotions about their ties to the job market and labor force participation, its movement gives context into where the economy and local job markets may be headed.

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