CA and NV Unemployment Rates Continue Higher Path than U.S.

Each month, California (5.2 percent) and Nevada (5.3 percent) unemployment rates keep clocking-in relatively much higher than the U.S. average of 3.9 percent, according to data released today by the California Employment Development Department (EDD) and the Nevada Employment Training and Rehabilitation Department (DETR).

From early 2023 to early 2024, California and Nevada have both steadily edged their way higher month by month. Today, they top the chart in state unemployment rates when compared to all 50 states across the nation, according to the U.S. Bureau of Labor Statistics.

California’s job market continued to grow moderately in January 2024, but the Golden State’s labor force (those willing and able to work) is still -233,000 below the state’s pre-pandemic level in early 2020. Meanwhile, Nevada’s non-farm employment level remained near an all-time high. However, the Silver State’s labor force of individuals needing/looking for a job reached a record high as well.

So, what explains this phenomenon?

It’s true that “open” job positions across both states are still unfilled by employers that can’t find the workers they need for a variety of reasons. Juxtapose this plenty-of-jobs trend with tens of thousands of individuals reentering the labor force and looking for work due to higher living costs and local affordability, as well as other factors. Under these circumstances, unemployment rates rise.

The following are the most recently published year-over-year and month-over-month January 2024 trends:

California’s January 2024 Employment Numbers
The California report shows the state’s unemployment rate rose to 5.2 percent in January 2024 (from a “readjusted” 5.1 percent in the month prior). For context, the state’s unemployment rate hit 16.1 percent at one point during the COVID-19 pandemic in 2020.

California employers added 58,100 non-farm monthly payroll jobs in January 2024:

• California’s labor force (pool of individuals willing and able to work) increased by 106,800 in January 2024 from one year before, as well as 15,300 workers from the month before — and now sits at nearly 19.36 million. It also remains approximately -233,000 below its pre-pandemic level in February 2020 of nearly 19.6 million.
• The total number of Californians holding jobs (non-farm payroll, agriculture related, independent contractor/freelancers) was 18.34 million, which is down by -48,900 from the combined total employment level this time last year.
• Non-farm company payroll jobs now total 18 million. These jobs (a subset of “total” jobs) increased by 225,400 (1.3 percent) from January 2023 to January 2024 compared to a U.S. annual gain of 1.9 percent.
• 10 of California’s 11 industry sectors gained jobs in January, with private education and health services (18,100) topping the gains thanks to strength in nursing care facilities and individual and family services.
• Professional and business services (15,700) also showed strong month-over-month growth thanks to gains in specialized design services, investigation and security services, and services to buildings and dwellings.
• Manufacturing (-800) was the only industry sector to lose jobs within the state for January 2024. This was due to above-average losses in the semiconductor and “other” electronic component manufacturing industry groups.

Nevada’s January 2024 Employment Numbers
The Nevada report shows employment in the state was up 900 jobs in January 2024 (month-over change) and 57,100 jobs from a year ago (3.8 percent annual increase) — all of which consists of non-farm payroll company/organization growth.

Total Nevada employment — which includes both non-farm payroll, agriculture/farm jobs, and any independent contractor/freelance jobs — stood at more than 1.57 million individuals in January 2024. Nevada’s labor force (those willing and able to work) stands at 1.61 million individuals, which increased by 1,320 individuals month-over-month and by 27,560 year-over-year. (When it comes to payroll employment specifically, June 2022 was the first month Nevada’s job market finally closed the gap inflicted since the COVID-19 recession in 2020.)

Nevada’s January 2024 unemployment rate stood at 5.3 percent (from a “readjusted” and unchanged 5.4 percent the month before), which is up from 3.7 percent in February of 2020 (pre-pandemic economy). For context, the state’s unemployment rate hit 28.2 percent at one point during the COVID-19 pandemic in 2020.

At the local/regional level, Nevada’s non-farm company payroll employers added, subtracted, or experienced the following trends in January 2024:

• Las Vegas-area employment increased 0.2 percent (1,800 jobs) in January 2024 from the month before and by 40,300 jobs (3.6 percent) since January 2023.
• Reno/Sparks-area employment decreased -0.3 percent (-900 jobs) in January 2024 from the month before, but it increased by 8,300 jobs (3.2 percent) since January 2023.
• Carson City-area employment increased 0.3 percent (100 jobs) in January 2024 from the month before and by 900 jobs (2.9 percent) since January 2023.

Ongoing Labor Market Perspective
These California and Nevada job market recoveries don’t account for lost ground and opportunity costs coming out of the COVID-19 pandemic.

Specifically in California, the state’s labor force — the pool of individuals willing and able to work — shrunk drastically due to public health restrictions and concerns, policy and employer decisions, the volatile business environment, federal and state financial relief, and worker fluidity in a tight labor market.

Essentially, both California and Nevada job markets may have been even more robust by January 2024 if COVID-19 never impacted the economy and policy decisions, assuming no other negative financial or economic events transpired.