CA & NV Job Market Growth Rate Slows as 2023 Approaches

California and Nevada’s respective unemployment rates stood at 4.1 and 4.9 percent in November as the Golden State’s labor force (individuals willing and able to work) remains approximately -100,000 smaller than before the COVID-19 pandemic and the Silver State’s job market is entrenched in new-record territory.

The following are the latest year-over-year and month-over November trends published by the California Employment Development Department (EDD) and the Nevada Employment Training and Rehabilitation Department (DETR) — released in mid-December:

California’s November 2022 Employment Numbers
The California report shows the state’s unemployment rate increased to 4.1 percent in November 2022 (from a “readjusted” 4 percent in October 2022). For context, the state’s unemployment rate hit 16.1 percent at one point during the COVID-19 pandemic in 2020.

California employers added 26,800 non-farm monthly payroll jobs in November 2022:

• California’s labor force (pool of individuals willing and able to work) increased by 290,400 in November 2022 from a year ago and now sits at nearly 19.3 million. However, it remains approximately -100,000 below its pre-pandemic level in February 2020 of nearly 19.4 million.
• The total number of Californians holding jobs (non-farm payroll, agriculture related, independent contractor/freelancers) was nearly 18.5 million, which is up 600,100 from the combined total employment this time last year.
• Non-farm company payroll jobs now total 17.75 million. These jobs (a subset of “total” jobs) increased by 675,000 (4 percent) from November 2021 to November 2022 compared to a U.S. annual gain of 3.3 percent.
• Ten of California’s 11 industry sectors gained jobs in November, with leisure and hospitality (13,900) showing the largest month-over gains thanks to strength in amusement parks and arcade, other amusement and recreational activities, as well as limited-service eating places.
• Educational and health services (13,400) also enjoyed a strong month-over gain thanks, in part, to above-average hiring in elementary and secondary schools, as well as business, technical, and trade schools and educational support services.
• Gains in Information (6,300) came almost entirely from growth in the motion picture and video production industry subsector.
• In October 2022, California (for the first time since the COVID-19 pandemic) finally and fully regained the 2.76 million non-farm payroll jobs lost during March and April of 2020 when pandemic recession transpired (gaining nearly 2.8 million jobs from April 2020 to October 2022).

Nevada’s November 2022 Employment Numbers
The Nevada report shows employment in the state is up 5,300 jobs in November 2022, and it’s also up 57,200 jobs from a year ago (a 4 percent annual increase).

Total non-farm employment (payroll and independent-contract jobs combined) remained near a record high of 1.47 million individuals. 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 November 2022 unemployment rate stands at 4.9 percent (from a “readjusted” 4.6 percent in October), 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 employers added the following jobs in November 2022:

• Las Vegas-area employment increased 0.2 percent (2,300 jobs) from October to November 2022 (month before) and by 50,000 jobs (4.9 percent) since November 2021.
• Reno/Sparks-area employment decreased -0.1 percent (-300 jobs) from October to November 2022 (month before) and by 8,500 jobs (3.4 percent) since November 2021.
• Carson City-area employment decreased -0.3 percent (100 jobs) from October to November 2022 (month before) but increased by 600 jobs (1.9 percent) since November 2021.
• While Nevada’s unemployment rate in November (4.9 percent) experienced a significant increase, this was due to individuals entering (or re-entering) the labor force (pool of people willing and able to work) — which is usually a good sign in a tight labor market where many job positions remain unfilled.

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 2022 if COVID-19 never impacted the economy and policy decisions, assuming no other negative financial or economic events transpired.