A. Gary Anderson
Graduate School of Management

California's Worker Shortage Struggle Continues ...

... and is likely to continue in 2023
By Victoria Pike Bond |
16,200 Jobs Added

California’s labor market expanded modestly in the latest numbers, with total nonfarm employment in the state growing by just 16,200 positions during December, according to an analysis released jointly with Beacon Economics. November’s gains were also revised down to 19,900 in the latest numbers, a 6,900 decrease from the preliminary estimate of 26,800.
 

70,000 More People Employed

Overall, California added jobs at a healthy pace in 2021 and 2022. As of December 2022, the state had recovered all of the jobs that were lost in March and April 2020 at the pandemic’s outset, and there are now 70,000 more people employed in California compared to February 2020. Over this time, total nonfarm employment in the state has grown 0.4% compared to a 0.8% increase nationally. California’s economy increased payrolls by 3.6% from December 2021 to December 2022, outpacing the 3.0% increase nationally over the same period.

“During the year, California’s employers added jobs more quickly than was the case in the national economy, but labor shortages in the state dampened job growth towards the end of the year and will continue to be a drag on job growth in 2023,”  said Taner Osman, Research Manager at Beacon Economics and the Center for Economic Forecasting.
 

4.1% Unemployment Rate

Indeed, the state’s struggle to add available workers continues. In December, the state’s labor force contracted by 26,800 workers. Since February 2020, California’s labor force has fallen by 313,600 workers, a 1.6% decline. This lack of workers made it difficult for some employers to bring on the additional staff they typically recruit during the holiday season. California’s unemployment rate held steady at 4.1% in December, unchanged from the previous month. While this figure is near historic lows, the state’s unemployment rate remains elevated relative to the 3.5% rate in the United States overall.

 

 

View Seasonally Adjusted Industry Employment Data For California's 28 MSAs and MDs

BEACON EMPLOYMENT REPORT 1/2023 (PDF)

 

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The Beacon Employment Report | California is a unique analysis of California’s employment numbers and trends.

Each month, a report links 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.