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The Center for Jobs and the Economy has released our initial analysis of the August Employment Report from the California Employment Development Department. For additional information and data about the California economy visit www.centerforjobs.org/ca.
California’s seasonally adjusted unemployment rate again eased, going from 13.5% in July to 11.4% in August. The unadjusted rate—the more relevant measure given the extent to which seasonal factors have been overwhelmed by the economic closures—went from 13.9% to 11.6%. Both numbers brought the data within the high range previously experienced during the Great Recession.
While the technical considerations are improving, the August numbers still have to be considered in the context of several COVID-related issues. They are based on surveys done the week of August 12, and do not reflect the upsurge in unemployment insurance claims in the second half of the month. Some of this surge likely was due to ongoing fraud within a program that was expanded rapidly in the current crisis conditions. Other factors likely validate at least a portion of this surge—school employees who became eligible for filing as districts finally made their decision on whether to open or continue distance learning, workers who suddenly had to choose between jobs and child care as those decisions were made in many cases at the last minute, and many self-employed as final decisions were made by the legislature on which of their jobs will remain eliminated under AB 5 in
spite of the current crisis.
Technical considerations also remain an issue. Survey response remained high for the establishment survey, and while improving, still remained below pre-COVID levels for the household survey. Efforts to minimize misclassification of the unemployed have addressed this issue to a large extent, although the national employment rate may have been as much as 0.7 point higher due to the lingering effects.
The latest numbers, however, show the recovery in California largely leveling off when measured by nonfarm wage & salary jobs. As indicated in the chart below, the August numbers show the rest of the country continuing to experience slow but still improving growth in both jobs and employment since June. Within California, jobs show little overall change in this period, but with somewhat better employment growth tracking closer to the rise in the rest of the US. Both series, however, remain well below the results for the other states which saw a much steeper rise in the V-component of the current recovery. California had more of a “U” and has yet to rise to the same level.
The rest of the states have also experienced closer tracking between jobs and employment. The gap has been wider in California in part likely due to the high level of freelancers in hard hit industries such as movies and tv, along with the continued additional job destruction elements from last year’s AB 5.
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