19,900 Jobs Added
Total nonfarm employment in California expanded modestly in the latest numbers, growing by 19,900 positions in June, according to an analysis by the UCR School of Business Center for Economic Forecasting & Development, released jointly with Beacon Economics. The figure represents steady job creation, even if at a slower pace than earlier in the year. May’s employment estimates were also revised down to 40,800, a 2,100 decrease from the preliminary estimate of 42,900, reminding observers that labor market data is often adjusted as new information becomes available.
“After an impressive start to the year, in which the state added jobs at a rate 20% higher than the rest of the nation, we shouldn’t over-interpret a slowdown in one month,” said Taner Osman, Research Manager at the Center for Economic Forecasting and Beacon Economics. “Still, California’s tight labor market has not eased up and will continue to act as a constraint on job growth.” Osman’s comments highlight two important themes: while month-to-month fluctuations are normal, structural challenges such as labor supply limitations remain a key factor in determining California’s job trajectory.
93.6% Total Jobs Recovered
While the state added jobs at a healthy pace in 2021 and 2022, as of June 2022, California has recovered just 93.6% of the jobs that were lost in March and April 2020, the onset of the pandemic. This statistic underscores how far the state has come in its recovery but also how much work remains. There are still 193,800 fewer people employed in California compared to pre-pandemic February 2020.
Total nonfarm employment in the state is 1% below pre-pandemic levels compared to a 0.3% drop nationally, meaning California lags the nation slightly in reaching full recovery. However, California’s larger deficit has also created more room for growth. With a greater share of jobs still to be regained, the state increased payrolls by 5.1% from June 2021 to June 2022, outpacing the 4.3% increase nationally over the same period. These year-over-year figures suggest that while California has ground to make up, it is expanding at a faster clip than the nation as a whole.
4.2% Unemployment Rate
The state’s unemployment rate also fell to 4.2% in June, a 0.1 percentage-point decline from the previous month. This improvement was driven by an increase in household employment (+75,000), a sign that more Californians were able to find jobs. Still, California’s unemployment rate remains elevated relative to the United States overall (3.6%). The difference points to the challenges California continues to face in fully reabsorbing its labor force, particularly in regions and industries that were more severely impacted by the pandemic.
While the state’s labor force expanded by 65,200 workers in June, California’s labor supply still falls short of pre-pandemic levels. Since February 2020, the state’s labor force has fallen by 172,400 workers, representing a 0.9% decline. This reduction in the available workforce contributes to the persistent tightness of the labor market and continues to put upward pressure on hiring conditions.
Taken together, the June labor market report illustrates a mixed picture. Job growth is continuing, unemployment is edging down, and payroll expansion is faster than the national average over the year. However, California has yet to fully regain the jobs lost during the pandemic, and the gap in labor force participation remains a pressing issue. The findings from the Center for Economic Forecasting and Beacon Economics provide important context for policymakers, businesses, and workers as the state charts its path toward full recovery.
