California's unemployment rate drops to 5.4% in February

California's economy boomed in February, with employers adding a surprising 138.100 jobs. This account for more than 20% national employment growth.

California's unemployment rate drops to 5.4% in February

Michael Bernick, who was formerly the director of the state Employment Development Department and is now an attorney at Duane Morris, said that it was a "shocking jump". "Virtually every sector is showing gains."

In February, ten of the 11 state industry sectors saw an increase in employment. The largest jump was in the leisure and hospitality sector, which added 30400 jobs. Los Angeles County saw the largest increase in employment, adding 30,400 jobs. This is its first normal season of tourism since 2019. 44% of the state's job gains were attributed to the county due to its large number of services industry jobs.

California, the most populous state in the country with almost 40 million inhabitants, was the first state to issue a statewide Stay-at-Home Order at the outbreak of the coronavirus pandemic. California lost just over 2.5 million jobs between March and April 2020, when its unemployment rate topped at 16.1%.

California Employment Development Department released new data Friday showing that the state has now recovered 87.2% the jobs it lost.

California's unemployment rate has fallen to 5.4%, from 5.7% in January. This makes California the third-highest in the country, behind New Mexico (and the District of Columbia). The unemployment rate in the United States is 3.8%.

In the past 13 months, California has added jobs in 12 of its 13 most recent months. This equates to about 101,700 new jobs each month. California is third in the country for fastest job growth, after Nevada and Hawaii.

Democratic Governor Gavin Newsom stated that "These numbers show that California continues to drive our nation’s job growth." Gavin Newsom said.

Despite California's employment gains, California has seen a decline in the number of people who are willing to return to work. This has led to a labor shortage across many industries.

Employers are desperate to find more workers to meet demand after pandemic restrictions are lifted. Soaring inflation has tempered wage increases, making everything more expensive.

Friday's report indicated that the labor shortage is decreasing as more people return into the workforce.

According to Sung Won Sohn (a professor of economics at Loyola Marymount University), California's labor participation rate, which is the percentage of people who have a job or are seeking one, rose to 61.6% for February. This was the highest level since November 2020.

He said that California's economy was "humming" It's encouraging to see both the labor force and employment moving in the right direction.

The state's new employment data was based on a survey that was taken in the week of February 12, before Russia invaded Ukraine. This was before gas prices skyrocketed. Gas prices in California have reached record highs since then. The statewide average for a gallon regular gas was $5.90 on Friday.

It is not clear how California's future employment could be affected by rising energy prices. Because of the pandemic more people are working at home than ever, which means fewer commutes.

"Absolutely, this remote work will continue to be a part of our lives." Bernick stated that this is the most significant structural change.


 

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