California and Nevada’s respective unemployment rates stood at 4.1 and 5.2 percent in December as the Golden State’s labor force (individuals willing and able to work) remains approximately -313,000 smaller than before the COVID-19 pandemic. In contrast, the neighboring Silver State’s job market is firmly entrenched in new-record territory.
“California’s struggle to add available workers continues,” said Taner Osman, research manager at the UC Riverside Center for Economic Forecasting and Development, as well as Beacon Economics. “This lack of workers made it difficult for some employers to bring on the additional staff they typically recruit during the holiday season.”
What’s more: The pace of monthly job growth was slowing down during the final months of 2022, revised numbers reveal. “During 2022, California’s employers added jobs more quickly than the national economy,” Osman said. “But labor force shortages in California dampened job growth toward the end of the year and will continue to be a drag on job growth in 2023.”
The following are the latest year-over-year and month-over December trends published by the California Employment Development Department (EDD) and the Nevada Employment Training and Rehabilitation Department (DETR) — released on Jan. 20:
California’s December 2022 Employment Numbers
The California report shows the state’s unemployment rate remained at 4.1 percent in December 2022 (from a “readjusted” 4.1 percent in November 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 16,200 non-farm monthly payroll jobs in December 2022:
Nevada’s December 2022 Employment Numbers
The Nevada report shows employment in the state was down -1,300 jobs in December 2022 (month-over change) versus being up 53,400 jobs from a year ago (a 3.8 percent annual increase).
Total non-farm employment (payroll and independent-contract jobs combined) remained near a record high of nearly 1.48 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 December 2022 unemployment rate stood at 5.2 percent (from a “readjusted” 4.9 percent in November), 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 December 2022:
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 December 2022 if COVID-19 never impacted the economy and policy decisions, assuming no other negative financial or economic events transpired.