California unemployment is falling. But economy still in deep hole from COVID-19 shutdown

Unemployment fell again in California last month, state officials announced Friday, but the economy has still recovered only one-third of the jobs that were lost to the COVID-19 pandemic.

The state’s unemployment rate fell to 11.4% in August, down from 13.5% the month before, the Employment Development Department reported. Payrolls grew by 101,900 jobs, the EDD said.

Yet the latest unemployment figures showed the economy remains in a deep hole. The agency said the state has regained just one-third of the 2.6 million jobs that were erased in March and April, when the coronavirus first appeared in California and Gov. Gavin Newsom imposed the initial stay-at-home order that locked down much of the economy and devasted restaurants, retailers and other businesses.

Many of the new jobs reported in August were temporary hires by the U.S. Census Bureau, according to a joint statement from state Labor Secretary Julie Su and Chris Dombrowski, acting director of the Governor’s Office of Business and Economic Development.

Business economist Sung Won Sohn, of Loyola Marymount University, said in a note to reporters that the economic recovery is being hampered by the wave of wildfires and the end of federal stimulus programs.

In addition, he said job growth has been held back by the partial re-imposition of the shutdown in mid-July, when COVID-19 infections were surging in California. Newsom has begun relaxing those restrictions in the past few weeks.

California has the nation’s fifth-highest unemployment rate, trailing only Nevada, Rhode Island, New York and Hawaii, he said.

Sohn said the unemployment rates would be even higher except 117,000 Californians left the job market last month — perhaps to stay home with children or to go back to school themselves and find new careers. By leaving the job market, they’re not counted as unemployed.

In the Sacramento area, unemployment dropped to 9.4% in August from 11.6% in July. The region added 11,800 jobs during the month, with the federal government and local government agencies leading the way. The region has 89,500 fewer jobs than it did a year ago, a loss of nearly 9%.

Elsewhere:

• Fresno’s unemployment rate fell to 10.9% from 13.4%.
• Merced’s rate fell to 11.3% from 14.4%.
• Modesto’s rate fell to 10.9% from 13.6%.
• San Luis Obispo’s fell to 7.8% from 10%.

Among the largest metro areas in California, unemployment in Los Angeles fell to 16.1%, from 17.9%. San Francisco’s rate fell to 8.2% from 10.3%.

This story was originally published September 18, 2020 at 10:39 AM.