Southern California’s bosses essentially stopped hiring in August, boosting employment across the region by only 100 positions.
My trusty spreadsheet, filled with state job figures released Friday, found 7.87 million at work in Los Angeles, Orange, Riverside and San Bernardino counties. The barely perceptible new hires were a steep drop from the average 23,400 workers added monthly in the past year as the economy emerged from its coronavirus chill.
The last time a hiring was worse was September 2021, when employment dripped 22,900 in a month. These counts are “seasonally adjusted” to lessen swings caused by cyclical staffing needs for jobs in industries such as education, tourism and retail.
August’s hiring slump left local employment up 280,900 in 12 months. Still, the Southern California job count is 32,400 below February 2020, or 99.6% of staffing in the last month before COVID-19 arrived.
Hiring’s decline is not totally surprising as the Federal Reserve tries to cool an overheated U.S. economy. Nationally, 315,000 jobs were added in August vs. a 487,000 monthly pace in the previous year. California bosses added 19,900 jobs in August — well off an average 70,000 pace over 12 months.
The dismal local job news could serve as a wake-up call. Inflation, for example, has been a painful hit to the wallet but so far not a Southern California growth blocker. The region’s real estate markets, to date, has largely escaped the significant pain one might expect after mortgage rates doubled in a short period.
But August’s hiring slowdown was likely more about a shortage of candidates and employers tempering expansion plans than a signal of widespread layoffs.
“If no one wants to work, then how do you create jobs?” asks economist Mark Schniepp of the California Economic Forecast. “We know there is still insatiable demand for workers. This is a slowdown in available working people — supply — rather than in demand for working people. Call out the robot army. We need them now at a restaurant and hotel near you.”
Southern California’s unemployment rate didn’t budge. It was 4.4% in August, the same as July, and half the 8.1% of a year earlier. The 383,900 workers officially counted as out of work were 8% above that of February 2020, so the region is still short of full recovery.
And ponder the four-county workforce, a tally of jobless plus employed. The yardstick of Southern California’s pool of labor was 8.73 million in August — down 16,000 in a month and 3% below pre-pandemic levels. That shortfall helps to subdue the hiring pace as bosses struggled to fill open positions.
August’s job slowdown was not universal, geographically speaking.
Much of the shortfall lies in Orange County, where jobs dropped 7,400 workers to 1.66 million vs. bosses adding 5,000 a month the past year. Unemployment? 3% vs. 2.8% a month earlier; 5% a year ago; and 2.8% in February 2020.
Los Angeles County added 2,100 to 4.53 million workers vs. adding 11,400 a month for a year. Unemployment? 4.9% vs. 5% a month earlier; 7.6% a year ago; and 4.3% in February 2020.
And there were 5,400 new jobs in the Inland Empire to 1.67 million workers vs. adding 7,000 a month for a year. Unemployment? 4.2% vs. 4% a month earlier; 6.4% a year ago; and 3.9% in February 2020.
The pandemic era’s hiring revival has not been an even one across Southern California industries …
Consider August hiring in key job niches vs. the recovery’s pace. These August worker counts, ranked by size of recovery, have not been adjusted for seasonal variations …
Healthcare, personal services: Added 5,900 workers last month to 1.2 million vs. jobs growing 5,000 at a monthly pace since the jobs bottom of April 2019.
Transportation/warehouses: Up 3,100 workers last month to 456,000 — slower than adding 3,600 monthly in the recovery.
Business services: Added 3,000 workers last month to 1.18 million — a drop from hiring 6,600 monthly in the recovery.
Restaurants: Up 1,100 workers last month to 671,000 — a drop from growing 10,000 monthly in the recovery.
Retailing: Added 900 workers last month to 745,000 — slower than hiring 5,400 monthly in the recovery.
Arts, entertainment and recreation: Up 600 workers last month to 160,000 — slower than adding 2,000 monthly in the recovery.
Construction, real estate, finance: Added 600 last month to 675,000 — a drop from hiring 2,700 monthly in the recovery.
Hotels: Up 400 workers last month to 78,000 — slower than adding 1,000 monthly in the recovery.
Manufacturing: Added 300 workers last month to 577, 000 — a drop from hiring 1,700 monthly in the recovery.
Government: Dropped 1,300 last month to 922,000 vs. jobs dipping 2,900 monthly in the recovery.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]