Seekers vs. Jobs: CA & NV Labor Force Growth Impeded in Sept

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California and Nevada’s job markets are experiencing slow-to-no labor force growth — the pool of individuals who are “willing and able” to work — as both states’ workforces and employers move forward under one of the most difficult labor market situations in modern history.

Nationally, a record number of job openings exist, with many hiring positions available in California and Nevada. But it was announced this week that both states experienced another month of slow employment gains compared to other post-recession periods — mostly because businesses can’t find workers to fill their employment needs.

In fact, California and Nevada are currently tied for the highest unemployment-rate spot out of all 50 states (both states harboring a 7.5 percent unemployment rate), according to the Urban Institute’s State Economic Monitor (scroll down and select the “EMPLOYMENT” tab).

Meanwhile, the National Association for Business Economics (NABE) has reported that 47 percent of October national survey respondents indicated their companies are experiencing a "worker shortage" (up from 39 percent in the July survey), with the shortfall most prevalent in the goods-producing sector. The reasons vary: 27 percent of respondents cited a shortage of applicants (up from 14 percent prior), and 20 percent report there are plenty of applicants but inadequate job matches (up slightly from 17 percent prior). What's more: the share of respondents reporting shortages of "skilled labor" continued its trajectory, with 47 percent of respondents reporting shortages of "skilled labor" (compared to 32 percent prior), while "shortages in unskilled labor" declined from 16 to 11 percent.

When it comes to California and Nevada, the following are the latest year-over-year and monthly September figures released this week by the California Employment Development Department (EDD) and the Nevada Employment, Training and Rehabilitation Department (DETR):

California’s September 2021 Employment Numbers
The California report shows the state’s unemployment rate held steady at 7.5 percent in September 2021 (from a “readjusted” 7.5 percent in August 2021). After 16 months, this unemployment rate is down from its 16 percent peak in April 2020 when the COVID-19 pandemic recession hit the economy.

California employers added 47,400 non-farm monthly payroll jobs in September:

  • California’s labor force (pool of individuals willing and able to work) shot up by 627,700 in September 2021 from a year ago and now sits at 19 million. However, it still remains -400,000 below its pre-pandemic level in February 2020 of 19.4 million.
  • California has now regained nearly 64 percent (1.72 million jobs) of the approximate 2.7 million jobs lost during March and April of 2020 when the COVID-19 pandemic recession transpired.
  • The total number of Californians holding jobs (non-farm payroll, agriculture related, independent contractor/freelancers) was 17.6 million, which is up 1.16 million from the combined “total” employment this time last year.
  • Non-farm company payroll jobs now total nearly 16.7 million. These jobs (a subset of “total” jobs) increased by 795,800 (5 percent) from September 2020 to September 2021 compared to a U.S. annual gain of 4 percent. Essentially, the state’s year-over-year pace of job growth has more than caught up to the nation’s annualized pace in the post-pandemic jobs recovery era, although it took 15 months (May 2020 – July 2021).
  • Nine of California’s 11 industry sectors gained jobs in September.
  • Leisure and hospitality (+23,300) enjoyed the state’s largest month-over gain, driven by strength in performing arts and spectator sports.
  • Professional and business services (+6,900) also posted a notable gain thanks to increases in computer systems design and architectural and engineering services.
  • “Other” services (-3,700) suffered the largest month-over employment decline with more than half of its losses coming in religious, grants, civic, and professional and like-organizations.

Nevada’s September 2021 Employment Numbers
The Nevada report shows employment in the state is up 4,400 jobs in September 2021, but still down by -96,500 jobs compared to April 2020 when the COVID-19 pandemic recession hit the economy. It’s a large gap continuing to close very slowly as individuals re-enter (and also leave) the labor force (pool of people saying they are willing and able to work).

The state’s September 2021 unemployment rate stands at 7.5 percent, down from a “readjusted” 7.7 percent in August — but still up from 3.7 percent in February of 2020 (pre-pandemic economy). The state’s total number of jobs is up 84,100 from September 2020 to September 2021 (a 6.5 percent increase), with total employment now standing at nearly 1.35 million.

Nevada employers added jobs for the 17th consecutive month in September:

  • Las Vegas employment increased by 2,400 jobs (0.2 percent) from August 2021 (month before) and by 69,300 jobs (8 percent) since September 2020.
  • Reno/Sparks regional employment increased by 800 jobs (0.3 percent) from August 2021 (month before) and by 11,600 jobs (4.9 percent) since September 2020.
  • Carson City employment decreased -100 jobs (-0.3 percent) from August 2021 (month before), but increased by 500 jobs (1.7 percent) since September 2020.
  • This latest report shows a slower pace of growth in the labor market compared to what Nevada experienced earlier in the year. Job gains month-to-month peaked in June, and they have slowed each month from July to September (moving toward a more typical pace of employment growth).
  • In September, most employment growth came from two industries: leisure and hospitality and retail trade.
  • In contrast, the professional and business services sector experienced the largest decrease in the number of jobs.
  • The unemployment rate’s improvement was unfortunately due in part to individuals leaving the labor force (pool of individual adults and some teenagers willing and able to work).
  • Nevada’s unemployment rate is likely to remain one of the highest in the nation compared to other states — at least in the near-term.

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