California’s Unemployment Rate Is Rising Again For The First Time Since April
As California’s COVID-19 cases surged in December — forcing many businesses to close — the state’s unemployment rate rose to 9%, according to a new report released today.
The jobs report from California’s Employment Development Department represents the first monthly increase in statewide unemployment since the pandemic’s initial peak in April 2020.
“We were hoping that we'd be adding jobs and clawing our way out of the hole with respect to adding jobs that have been lost,” said Beacon Economics researcher Taner Osman. “Losing jobs at this stage clearly is not a positive sign in the short term.”
Employers across the state cut 52,200 jobs last month, backsliding on slow but steady gains since late spring.
The leisure and hospitality industry took the biggest hit, with restaurant and hotel workers again laid off in droves as public health orders cancelled in-person dining and travelers stayed home.
The worsening employment outlook comes at a time when jobless Californians have been struggling to secure unemployment benefits. The state’s number of backlogged claims keeps growing, and 1.4 million Californians have had their benefits suspended due to anti-fraud efforts.
In December, 1.5 million fewer Californians had a job compared with pre-pandemic employment levels. The state has only regained 44% of the jobs lost in the early stages of the pandemic.
Osman said it’s unlikely that next month’s report will see much of an improvement, but a quicker vaccine rollout could significantly boost recovery in months to come.
“The labor market trajectory going out into 2021 is going to be tethered to how well we're able to contain the spread of the virus,” he said.