California Labor Market Expansion Continues Amid Omicron; State's Unemployment Rate Dips Despite Growth In Workforce

Uneven recovery among industry sectors persists
By Victoria Pike Bond |

California’s labor market continued to expand at a steady pace in December, with total nonfarm employment in the state growing by 50,700 positions over the month. According to the January 2022 Beacon Employment Report | CA, the state's growth accounted for just over one-quarter of the nation’s overall job gains.

California’s job growth from November was also revised up to 52,200 in the latest numbers, a 6,500 increase from the preliminary estimate of 45,700. Still, the state has only recovered 72% of all the jobs it lost in March and April 2020.

“Many states have fully recovered the jobs they lost during the pandemic,” said Taner Osman, Research Manager at the UCR School of Business Center for Economic Forecasting & Development and Beacon Economics. “Since California is still playing catch-up, we expect to see stronger job growth in 2022 compared to the nation overall.”

California’s unemployment also rate fell to 6.5% in December, despite the state's workforce expanding by 30,200.

 

50,700 Jobs Added in December 2021

California’s labor market continued to expand at a steady pace in December, with total nonfarm employment in the state growing by 50,700 positions over the month, according to an analysis released jointly by the Center for Economic Forecasting & Development and Beacon Economics.

California’s growth accounted for just over one-quarter of the nation’s overall job gains for the month. California’s gains in November were also revised up to 52,200 in the latest numbers, a 6,500 increase from the preliminary estimate of 45,700.

 

768,600 Fewer People Unemployed

While California added jobs at a healthy pace in 2021, as of December 2021, the state has recovered just 72% of all the jobs lost in March and April 2020, and there are now 768,600 fewer people employed in California compared to February 2020. Total nonfarm employment in the state has contracted 4.4% since the pandemic crisis began compared to a 2.3% drop nationally. However, during 2020, California added jobs at a faster rate than the national economy. Payrolls in the state expanded 6% from December 2020 to December 20201, well above the 4.5% increase nationally over the same period.

“Many states have fully recovered the jobs they lost during the pandemic,” said Taner Osman, Research Manager at the Center for Forecasting and Beacon Economics. “Since California is still playing catch-up, we expect to see stronger job growth in the state in 2022, compared to the nation overall.”

 

6.5% Unemployment Rate

California’s unemployment rate fell to 6.5% in December, a 0.5 percentage-point decline from the previous month. However, the state’s unemployment rate remains elevated relative to the 3.9% rate in the United States overall. California’s labor supply has contracted significantly since the start of the pandemic. Despite an expansion of 30,200 workers in December, since February 2020, the state’s labor force has shrunk by 358,100 workers, a 1.8% decline.

 

Seasonally Adjusted Employment by Industry, November 2020 and 2021

 

 

View current Report

 

The Beacon Employment Report | California is a unique analysis of California’s employment numbers and trends. Each month, they link their econometric predictions to data released by the U.S. Bureau of Labor Statistics and the California Employment Development Department to identify important changes in employment across industries and regions. The Beacon Employment Report is also one of the few analyses that uses seasonally adjusted numbers, which are critical to revealing accurate trends and insights within data.