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California Employment Report
for December 2020
 

The Center for Jobs and the Economy has released our initial analysis of the December Employment Report from the California Employment Development Department. For additional information and data about the California economy visit www.centerforjobs.org/ca.

The December data in general begins to reflect the effects of the state’s stay-at-home orders, with employment down and substantial job losses in the lower wage industries repeatedly battered by the state’s cycles of closings and reopenings.  Higher wage and goods movement industries continued to experience positive jobs growth, again illustrating how the state’s actions have accelerated the bifurcation of the California economy. 

Overall, the December numbers show a substantial weakening of the pace of recovery in California, while jobs and employment remained largely on their prior course in the other states.
 
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The bifurcation of the state’s economy over the next several years also underlies the economic projections in the governor’s recent Proposed Budget.  While the higher wage industries are expected to recover and resume growth by 2020 or 2021—in large part because of the options provided through telecommuting—jobs in the harder hit population serving and tourism services industries (Retail Trade; Educational Services; Social Assistance; Arts, Entertainment & Recreation; Accommodation & Food Services; and Other Services) are not expected to recover until 2025 or 2026.  Or if ever, given that the current state strategies and expanding regulations imposed even under crisis conditions have accelerated automation and alternative sales channel development trends that were already under way prior to the pandemic.  Many of these lower and middle wage jobs could be recovered more quickly through expansion of telecommuting options, but the lack of flexibility under state regulations makes this option too costly and legally risky for employers. 

This recovery pattern underlies the budget’s expectations of strong revenue growth from the healthy higher wage component of the economy, more than counterbalanced by continued high expenditures for social program caseload as lower wage workers are forced to wait longer for their jobs to recover.
 
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CA Unemployment Rate Rises
 
9.0%
 
CA Unemployment Rate
 
  

California's reported unemployment rate (seasonally adjusted) in December rose 0.9 point from the revised November number to 9.0%. 

Total reported employment dropped 91,700 from the revised November numbers, while total unemployment grew 163,700.  The labor force was largely unchanged at a net growth of 72,000.  These, however, are the statistical rather than the actual results.  Employment in the unadjusted numbers showed a deeper drop of 195,700.

While COVID-related issues with the core surveys used to estimate the labor force and jobs numbers continue, their overall effect remains low compared to the beginning of the pandemic period.  However, the response rate for the household survey has been declining, although remaining within statistical acceptability.  The misclassification issue continues but at lower levels, with the national unemployment rate undercounted by up to 0.6% due to this factor.  Response rates of the establishment survey varied by industry, in particular transportation and warehousing which saw a 20% decline.
 
 
US Unemployment Rate
 
6.7%
 
US Unemployment
Rate
 
  

The reported national numbers show US unemployment rate (seasonally adjusted) unchanged at 6.7%, but more likely was up to 0.6 point higher due to the ongoing misclassification issues.  Employment remained essentially level with a growth of only 21,000, and unemployment edging up by only 8,000.  The national labor force rose 31,000.  The US numbers reflect revisions in the seasonally adjusted data from 2016 forward.
 
 
Nonfarm Jobs Drop 52.2k
 
-52.2k
 
Nonfarm Jobs Change
 
  

Nonfarm wage and salary jobs dropped 52,200 (seasonally adjusted) in December, while the gains in November were revised to 5,200 from the previously reported 57,100.  Nonfarm jobs nationally were down 140,000. California job growth was led by Construction (31,600), Professional, Scientific & Technical Services (20,300), and Administrative & Support & Waste Services (10,900).  Losses were in 10 industries led by Accommodation & Food Services (-97,300), Arts, Entertainment & Recreation (-19,700), and Other Services (-11,000).  The numbers shown in the chart below are the seasonally adjusted numbers.
 
 
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Counties with Double-Digit Unemployment
 
15
 
Counties with Unemployment
Above 10%
 
  

The number of counties with an unemployment rate at 10% rose sharply to 15. The unadjusted rates ranged from 5.5% in Marin to 17.7% in Imperial.
 
 
 
15th
 
Los Angeles-Long Beach-Anaheim MSA Ranking for Worst Unemployment Rate in the Country
 
  

In November, the unemployment rate for the Los Angeles-Long Beach-Anaheim MSA was 9.6%, moving that region up to 15th place for the worst rate among the 389 MSAs in the US.  Within California, Los Angeles County at 10.6% had the third worst unemployment rate in California in December.  El Centro MSA (Imperial County) had the worst unemployment rate in the nation.
 
 
 
California Center for Jobs
 
 
 
 
 
Contact
1301 I Street
Sacramento, CA 95814
916.553.4093
 
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