California extended its slow but steady economic recovery in April, adding more than 100,000 jobs for the third consecutive month, officials said Friday.
The state’s Employment Development Department says California has now regained 1.3 million jobs, or 48% of the 2.7 million it lost in March and April of 2020.
The new numbers show California has become an engine in the nation's recovery, accounting for 38% of all jobs gained in the U.S. in April. Since February, California has added 390,300 jobs following sharp declines in December and January amid a surge of new coronavirus cases.
More than 60% of the job gains in April came from hotels, restaurants and entertainment venues — businesses impacted the most by Gov. Gavin Newsom's previous statewide stay-at-home order. California has waited longer than other states to ease restrictions on those businesses, with Newsom pledging to lift most of the rules on June 15.
Despite those job gains, California still has the second highest unemployment rate in the country at 8.3%, trailing Hawaii. But that number can be deceiving. The unemployment rate is a percentage of people who are looking for work and do not have a job. As more people start looking for work, that can offset the number of new jobs added.
Data released Friday shows 33,600 people started looking for work again in California. Experts say that is a good sign.
“At this state of the recovery, we shouldn’t really focus too much on the jobless rate,” said Sung Won Sohn, a professor of finance and economics at Loyola Marymount University. “We want people coming out of the woodwork and rejoining the labor force. That would be a very positive sign. And to some extent that is beginning to happen.”
The state's leisure and hospitality industry is still down more than 500,000 jobs since the pandemic began. Experts believe that sector will fuel the state's job growth over the next few months as more businesses reopen.
However, those gains are masking some of the state's other problems, according to Michael Bernick, a lawyer and former director of the state's Employment Development Department. Small business revenue in the state has declined 30% since January 2020, while the number of small businesses that are open is down more than 36% over the same period, according to Opportunity Insights, an economic tracker based at Harvard University.
Bernick said that illustrates an “employment divide” in California, as larger companies prosper and small businesses struggle.
“Our small business economy is decimated and shows no signs of improvement,” he said.
Newsom and Democratic leaders in the Legislature are negotiating a new spending package that aims to pump billions of dollars in aid to individuals and small businesses over the next year. Newsom calls it the biggest economic recovery package in the state's history,.
Newsom, who is likely to face a recall election spurred by anger over his handling of the pandemic, gleefully tweeted April's unemployment numbers, writing “the #CAComeback is happening in real time.”
Many business owners in California say they can't find enough people willing to work, a sentiment reflected in April's jobless numbers by a small increase in manufacturing jobs coupled with a decrease in construction jobs.
People getting unemployment benefits are now receiving an extra $300 a week from the federal government because of the coronavirus. At least 22 states have said they will end those extra benefits in part to encourage more people to join the workforce.
California is not among them. Newsom's spending proposal includes even more help for individuals, offering $12 billion in direct payments to most adults while paying off outstanding rent and utility bills.
Friday's employment data shows an additional 33,600 people resumed looking for full-time jobs in April, boosting the state's pool of potential workers. Compared to April of last year, California's workforce grew by 363,300, now totaling more than 18.9 million people.
