Labor Markets Continue Slog as Worker Supply Problems Persist

Workers illustration

The California and Nevada job markets’ slow labor force growth is a common month-to-month trend nowadays, and it seems to have entrenched itself for now. The pool of individuals who are “willing and able” to work — as well as job-jumpers from one occupation to another — is making for one of the most difficult job market situations in modern history as employers trudge forward.

Particularly in California: “We’re not adding the volume of jobs that would put a serious dent in what was lost to the pandemic,” said Taner Osman, research manager at UC Riverside’s Center for Economic Forecasting and Development. “The state’s shrunken workforce has emerged as the biggest constraint on future employment expansion. Many restrictions on business activity have been removed for months and are not the main driver of California’s labor market issues — worker supply is.”

Osman said while employment levels in some sectors across California have surged beyond pre-pandemic levels, those in other sectors remain far short. “At this rate, it’s unlikely we’ll see a full job recovery in California in 2022.”

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

California’s November 2021 Employment Numbers
The California report shows the state’s unemployment rate fell to 6.9 percent in November 2021 (from a “readjusted” 7.3 percent in October 2021). After 18 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 45,700 non-farm monthly payroll jobs in November:

  • California’s labor force (pool of individuals willing and able to work) shot up by 436,100 in November 2021 from a year ago and now sits at nearly 19.05 million. However, it still remains -350,000 below its pre-pandemic level in February 2020 of 19.4 million.
  • California has now regained nearly 70 percent (1.89 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 more than 17.7 million, which is up 735,500 from the combined “total” employment this time last year.
  • Non-farm company payroll jobs now total more than 16.8 million. These jobs (a subset of “total” jobs) increased by 821,800 (5.1 percent) from November 2020 to November 2021 compared to a U.S. annual gain of 4.1 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 to play catch-up (May 2020 – July 2021).
  • Eight of California’s 11 industry sectors gained jobs in November.
  • Professional and business services (+18,800) led the way thanks to large gains in professional, scientific and technical services (due in part to increases in scientific research and development services and computer systems design and related services).
  • Educational and health services (+9,500) also showed good month-over job gains thanks to strength in ambulatory health care services and educational services.
  • Construction’s sizable loss (-1,700) was largely due to reductions in specialty trade contractors.

Nevada’s November 2021 Employment Numbers
The Nevada report shows employment in the state is up 2,600 jobs in November 2021 from the prior month, but still down by -82,700 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 November 2021 unemployment rate stands at 6.8 percent, down from a “readjusted” 7.2 percent in October — but still up from 3.7 percent in February of 2020 (pre-pandemic economy). The state’s total number of jobs is up 99,300 from November 2020 to November 2021 (a nearly 8 percent increase), with total non-farm employment now standing at nearly 1.37 million.

Nevada employers added jobs for the 19th consecutive month in November:

  • Las Vegas-area employment increased by 0.2 percent from October to November 2021 (month before) and by 75,600 jobs (8.4 percent) since November 2020.
  • Reno/Sparks-area employment decreased by -0.5 percent from October to November 2021 (month before) and by 9,500 jobs (4 percent) since November 2020.
  • Carson City-area employment increased by 0.7 percent from October to November 2021 (month before) and by 1,500 jobs (5.1 percent) since November 2020.
  • The entire Nevada state’s unemployment rate-drop to 6.8 percent in November from 7.2 percent in October was the largest month-over-month decline this year.
  • The state’s 6.8 percent unemployment rate is likely to remain one of the highest in the nation and reflective of the long road left to a complete economic recovery. However, this unemployment rate is down considerably from 8.7 percent in October 2020.

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