California's Jobless Rate Falls to Pre-Pandemic Levels, But Still Remains Highest in the Nation

Hiring in California slowed significantly in November even as the state’s unemployment rate dipped below 7% for the first time since the start of the pandemic in March 2020, according to new data released Friday.

Even though California’s unemployment rate fell to 6.9% in November from 7.3% in October, the state still has the highest jobless rate of all U.S. states, according to data from the U.S. Bureau of Labor Statistics.

The data showed that California employers filled 45,700 new jobs last month. That’s less than half of the jobs the state gained in October, but it was still enough to account for nearly 22% of all U.S. job growth in November.

California has added 977,200 new jobs since February, a feat Gov. Gavin Newsom called “an unprecedented achievement.”

But the state lost 2.7 million jobs in March and April of 2020, back when Newsom issued the nation’s first statewide stay-at-home order that forced many businesses to close.

Nineteen months later, California has regained nearly 70% of those jobs. That’s compared to 82% of jobs recovered nationwide since the start of the pandemic, according to Sung Won Sohn, professor of finance and economics at Loyola Marymount University.

While California “continues to see a robust recovery, creating nearly 22% of the nation’s jobs in November and the largest unemployment rate decrease since February, there’s still more work to be done getting folks back to work and supporting those hardest hit by the pandemic,” said Newsom.

White-collar office jobs accounted for more than 41% of California’s job gains in November, followed by gains in the sectors of education, health services, and leisure and hospitality, which includes restaurants and hotels. Construction jobs declined by 1,700, mostly because of employment losses for specialty trade contractors.

Counties in the Bay Area, which have some of the state’s wealthiest residents, registered the lowest unemployment rates. Marin County had 2.9% unemployment, followed by Santa Clara County at 3.2% and San Francisco at 3.3%.

Los Angeles County, the nation’s most populous county with nearly 10 million residents, had a 7.1% unemployment rate. The county has a disproportionate number of service industry jobs, including in restaurants and hotels, that employers have had trouble finding workers for.

Imperial County, which borders Arizona and Mexico, had the state’s highest unemployment rate at 15.5%, which is typical for that county’s rural economy that relies mostly on agriculture.

But other sparsely populated Central Valley counties with traditionally high unemployment rates posted numbers below the statewide average — including Shasta, Butte and Madera counties.

That shows the state’s job growth is not limited to the state’s population centers along the coast, said Michael Bernick, a former director of the Employment Development Department and a lawyer at the Duane Morris law firm.

“Other parts of the state are gaining and in fact doing better than they did throughout much of the pre-pandemic times,” he said.

The new unemployment data is based on surveys taken the week of Nov. 12. That survey showed that California’s workforce — defined as the number of people who are either working or looking for work — increased by 17,900 people in November.

Still, the percentage of people in California’s workforce compared to the overall population remains below the U.S. level.

While California has averaged more than 97,000 new jobs per month since February, the state still had 1.1 million job openings at the end of October, according to the new data. That number has persisted since August as employers have struggled to find workers.

“I don’t think workers are in any hurry to go back to work,” Sohn said. “The longer they wait, the higher wage they are going to get. And there are lots of jobs to choose from.”