State Job Markets are Steady as CUs Ponder Economy’s Future

California’s job market grew steadily in May 2023, although its labor force (those willing and able to work) is still -160,000 below the state’s pre-pandemic level in early 2020. Meanwhile, Nevada gained a small 1,500 jobs month over month as total non-farm employment remained at a record high of more than 1.54 million workers.

In the Golden State, the California Center for Jobs and the Economy recently released two useful reports for visualizing what has transpired from 2019 – 2023 in the state’s labor market and economy:

• Special Report on Post-COVID Economy: State Economy, Business Trends, Out-of-State Migration, Employment, Labor and More.
• California’s Economy, Slowed by COVID, Ranks 18th Overall.

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

California’s May 2023 Employment Numbers
The California report shows the state’s unemployment rate remained at 4.5 percent in May 2023 (from a “readjusted” 4.5 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 47,300 non-farm monthly payroll jobs in May 2023:

• California’s labor force (pool of individuals willing and able to work) increased by 179,700 in May 2023 from one year before and by 24,700 workers from the month before — and now sits at 19.43 million. However, it also remains approximately -160,000 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 more than 18.54 million, which is up 57,300 from the combined total employment level this time last year.
• Non-farm company payroll jobs now total nearly 18.09 million. These jobs (a subset of “total” jobs) increased by 427,500 (2.4 percent) from May 2022 to May 2023 compared to a U.S. annual gain of 2.7 percent.
• Eight of California’s 11 industry sectors gained jobs in May, with private education and health services (16,400) leading the way thanks to above-average gains in general medical and surgical hospitals, nursing care facilities, and individual and family services industry groups.
• Professional and business services (11,700) enjoyed the second-strongest month-over increase as computer systems design and related services, scientific research and development, employment services, and services to buildings and dwellings contributed to the gain.
• Manufacturing (-5,700) suffered the largest month-over job reduction due, in part to losses in computer and electronic manufacturing, as well as losses in fabricated metal manufacturing, machine manufacturing, and apparel manufacturing.

Nevada’s May 2023 Employment Numbers
The Nevada report shows employment in the state was up 1,500 jobs in May 2023 (month-over change) and 55,300 jobs from a year ago (3.7 percent annual increase) — which altogether includes total Nevadans holding jobs (non-farm payroll, agriculture related, and independent contractor/freelancers).

Total non-farm employment (payroll and independent-contract jobs combined) remained at a record high of more than 1.54 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 May 2023 unemployment rate stood at 5.4 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 May 2023:

• Las Vegas-area employment increased 0.1 percent (1,400 jobs) in May 2023 from the month before and by 49,200 jobs (4.6 percent) since May 2022.
• Reno/Sparks-area employment decreased -0.2 percent (-500 jobs) in May 2023 from the month before, but it increased 8,700 jobs (3.3 percent) since May 2022.
• Carson City-area employment increased 0.3 percent (100 jobs) in May 2023 from the month before and by 1,500 jobs (4.9 percent) since May 2022.
• Nevada’s labor force (pool of individuals who are willing willing/able to work) grew by 4,000 people.
• Nevada still has a high unemployment rate compared to other states.

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