Seasonally Adjusted CA & NV Job Market Figures Released

California experienced a mini-jolt in the increasing number of individuals entering or re-entering the labor force to look for a job, while in Nevada those residents are doing so at a much slower pace. That’s according to the latest state-level seasonally adjusted employment numbers released this week.

The rising labor force trend in California in early 2023 compared to the latter months of 2022 could be an indicator of entrants returning into the labor market after deciding not to be employed — or choosing to only work part-time — for so many months coming out of the COVID-19 pandemic. For many consumers and workers going into 2023, the cost of living (inflation) is front and center as they try to manage their money appropriately.

The following are the latest year-over-year and month-over January 2023 trends published this week by the California Employment Development Department (EDD) and the Nevada Employment Training and Rehabilitation Department (DETR):

California’s January 2023 Employment Numbers
The California report shows the state’s unemployment rate rose to 4.2 percent in January 2023 (from a “readjusted” 4.1 percent in December 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 96,700 non-farm monthly payroll jobs in January 2023:

• California’s labor force (pool of individuals willing and able to work) increased by 117,100 in January 2023 from one year before and by 44,700 workers from the month before — and now sits at more than 19.3 million. It remains approximately -193,000 below its pre-pandemic level in February 2020 of more than 19.5 million.
• The total number of Californians holding jobs (non-farm payroll, agriculture related, independent contractor/freelancers) was more than 18.5 million, which is up 297,600 from the combined total employment level this time last year.
• Non-farm company payroll jobs now total 17.96 million. These jobs (a subset of “total” jobs) increased by 599,500 (3.6 percent) from January 2022 to January 2023 compared to a U.S. annual gain of 3.3 percent.
• Eight of California’s 11 industry sectors gained jobs in January, with government (46,000) leading the way in strong gains within state government educational services, boosted by the end of the University of California academic workers strike in December.
• Leisure and hospitality (20,800) also enjoyed an extremely strong month-over gain — thanks in part to gains in not just gambling industries, but also in performing arts, spectator sports, and talent and sports agents.
• Construction (-7,300) suffered its largest month-over job loss, due in part to the severe winter storms and extreme weather across the state, as well as from reductions in the specialty trade contractor subsector.

Nevada’s January 2023 Employment Numbers
The Nevada report shows employment in the state was up 4,900 jobs in January 2023 (month-over change) and 75,7000 jobs from a year ago (a 6 percent annual increase).

Total non-farm employment (payroll and independent-contract jobs combined) hit a record high of more than 1.53 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 January 2023 unemployment rate stood at 5.5 percent (from a “readjusted” and unchanged 5.5 percent in December), 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 January 2023:

• Las Vegas-area employment increased 0.4 percent (4,000 jobs) in January 2023 from the month before and by 62,600 jobs (6 percent) since January 2022.
• Reno/Sparks-area employment increased 0.3 percent (800 jobs) in January 2023 from the month before and by 11,900 jobs (4.6 percent) since January 2022.
• Carson City-area employment increased 0.3 percent (100 jobs) in January 2023 from the month before and by 1,200 jobs (3.9 percent) since January 2022.
• At 5.5 percent, Nevada’s state unemployment rate is likely to remain one of the highest rates in the nation throughout 2023. However, what affects this figure is the state’s labor force participation rate (individuals willing and able to work), which faces difficulty in increasing and suggests workers continue to enter or re-enter the labor force very slowly — if at all.
• Except for the leisure and hospitality industry, every sector of Nevada’s economy employs more people than before the COVID-19 pandemic. The unemployment rate is high (compared to other states), as is the total number of job openings in the state, reflecting an ongoing tight labor market.

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 2023 if COVID-19 never impacted the economy and policy decisions, assuming no other negative financial or economic events transpired.