California Has the Highest Unemployment Rate in the Continental US - MikeLembeck.com, Orange County Multifamily Broker, Apartments, 1031 Exchanges

California Has the Highest Unemployment Rate in the Continental US

A big slowdown in job growth raises the question of what might start happening in other states.

California has a massive jobs engine that drives its economy. Whether in tech, agriculture, entertainment, construction, healthcare, finance, education, or any of the other areas in the state, companies employ many millions, and use vast amounts of commercial real estate in the process.

A rise in unemployment suggests that companies feel pressure and will eventually pare back other areas of spending, including leases for retail stores, factories, offices, and warehouses. People who are out of work will have less to spend on housing, whether multifamily or individual homes.

The February 2024 State Employment and Unemployment report from the Bureau of Labor Statistics shows that California’s unemployment rate has been growing over the last year significantly in excess of the 3.9% national average. In February 2024, the seasonally adjusted number rose to 5.3%, the highest for any state in the country. The change from the year before — 0.8 percentage points lower at 4.5% — was one of the largest in the country, exceeded only by Connecticut, Maine, and Rhode Island.

The metropolitan area of Los Angeles-Long Beach-Glendale had an unemployment rate of 5.4%.

Move to non-seasonally adjusted numbers — the actual raw figures for February — and California’s unemployment rate is 5.6%, with Los Angeles-Long Beach-Glendale falling to 5.0%.

Corresponding to the increased unemployment is a low rate of producing new jobs. While California had a year-over-year increase in jobs at 179,700, it also was only 1.0%. The number was only as large as it was because California already had the largest labor force of any state in the country, its absolute growth was only the third largest for a state in the U.S.

An Associated Press analysis added more light to the change in employment, with a significant slowing of job growth last year.

“The federal government releases job numbers each month that state officials use to measure the health of the economy,” AP wrote. “Each year, the federal government analyzes these numbers to see if they match payroll records. Normally, the revisions are small and don’t impact the overall view of the economy. But this year, while the data initially showed California added 300,000 jobs between September 2022 and September 2023, the corrected numbers released earlier this month show the state added just 50,000 jobs during that period.”

“I think California’s economy is the leading edge of the national economic slowdown,” Sung Won Sohn, a professor of finance and economics at Loyola Marymount University, told AP.

Seven of 11 job sectors lost jobs in February. Construction saw a drop because of strong storms in February. The tech industry has been paring back from overly enthusiastic hiring during the pandemic.

Article courtesy of Erik Sherman of GlobeSt.com


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