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California’s Unemployment Rate Falls, But Many Job Gains May Not Last

Unemployment fell in a state jobs report released on Sept. 18, 2020. (California Employment Development Department)
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California’s unemployment rate dropped to 11.4% in August, according to a new jobs report released Friday by the state’s Employment Development Department (EDD).

For the first time since the COVID-19 pandemic began, the state’s unemployment rate is now below the 12.3% peak seen during the Great Recession.

However, many of August’s job gains will only be temporary. And Los Angeles County’s unemployment rate continues to be among the highest in the state.

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California added close to 102,000 jobs last month. Government employment posted the biggest gains, driven in large part by temporary hiring for the 2020 U.S. Census.

In contrast, the hard-hit leisure and hospitality industry continued to see layoffs. Close to 15,000 jobs vanished from businesses such as restaurants and hotels. L.A. County’s economy relies more heavily on employment in this sector. Local joblessness remained high at 16.1% while many other parts of the state have returned to single-digit unemployment figures.

Employment attorney and former EDD director Michael Bernick said California appears to be past the worst of the job devastation wrought by the pandemic. But other indicators suggest the state’s economic recovery has stalled.

“Job postings are down more than nationwide and consumer spending is way down,” Bernick said.

California continues to receive hundreds of thousands of new unemployment filings every week, Bernick noted, though he warned that some of those claims may be fraudulent.

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