California’s unemployment rate rises to 4.2% as employers add 96,700 jobs

(The Center Square) – California’s unemployment rate rose to 4.2% in January, up 0.1 percentage point from December, according to the state Employment Development Department. Employers in the Golden State added 96,700 nonfarm payroll jobs versus 16,200 in December. The jobless data and new hires derive from separate federal surveys, one of businesses and the other of households.

With the EDD updated 2022 employment data, the state has recovered nearly all of its 2.8 million job losses due to pandemic closures of businesses and schools. California has about 12% of the U.S. population. Most of the Golden State’s populace resides in urban, coastal communities.

Eight of California’s 11 industry sectors added new hires in January versus 10 of 11 sectors in December. Government employment led the way, with 46,000 new jobs added in January, notably in education services. A factor in this sector’s employment growth was the ending of a University of California academic worker strike, where 48,000 employees had walked off the job.

Leisure and hospitality employers added 20,800 new hires in January compared with 5,300 nonfarm payroll jobs in December. Job gains in the leisure and hospitality sector included gambling industries, performing arts, spectator sports and talent and sports agents, according to the EDD. California has four NBA teams: the Golden State Warriors, Los Angeles Clippers, LA Lakers and Sacramento Kings, all of which are looking at Western Conference playoff action that begins on April 11.

The construction industry had the biggest month-over job losses of 7,300, as harsh winter storms with rain, high winds, power outages and flooding lashed the Golden State. A reduction in the subsector of specialty trade contractors also contributed to job losses.

In January, the total nonfarm jobs payroll jobs in California’s 11 major industries totaled 17,966,400, delivering a net gain of 96,700 from December. This data derived from a post-benchmarking upward revised of 107,800 jobs for a month-over gain of 124,000 new hires in December, according to the state EDD.

California’s year-over employment data showed that nonfarm jobs rose by 599,500, a 3.5% jump from January 2022 to January 2023. These state figures compare favorably to the U.S. annual gain of 4,967,000 jobs, or 3.3%.

In January, the lowest unemployment rate was in the coastal area of Marin County north of San Francisco. Meanwhile, Plumas County registered a 10.1% rate of joblessness, with Imperial and Colusa counties at 16.2% and 17.5%, respectively.

“The big overall gain in January has a few cautionary notes,” according to Jeffrey Michael, Director of Public Policy Programs and professor of public policy at Pacific McGeorge School of Law in Sacramento, “most notably a significant decline in the tech-heavy information sector and a decrease in the highly cyclical construction sector. These are areas to watch in the months ahead as job growth is expected to slow.”