California’s economic recovery picked up pace in February, as the state recovered jobs lost due to the terrible increase in COVID-19 in the winter, bringing the unemployment rate to its lowest level since the pandemic began last year, officials said.
The state’s unemployment rate fell to 8.5% from 9.0% in January, as employers added 141,000 jobs, according to state data published Friday.
“Today’s news, coupled with the governor’s announcement this week that California continues to expand the eligibility of the COVID-19 vaccine, is a milestone in our continued recovery,” Dee Dee Myers, director of the Office of Business and Economic Development Governor and State Labor Secretary Julie A. Su said in a statement.
The February reversal recovered nearly 91% of jobs lost in December and January, when a coronavirus outbreak and business closures had a negative impact on employment.
About a third of job earnings came from Los Angeles County, where small businesses were hit hard during the boom. Now they are calling the workers back, while the state and county are easing restrictions on coronavirus, analysts said. The county of San Diego, with a focus on tourism, provided an additional 23% of the jobs obtained.
Repressed demand, savings that some people accumulated during the pandemic and the warmer climate will continue to stimulate consumption and employment, especially in services, said Sung Won Sohn, economist at Loyola Marymount University.
The state’s labor market “still has a steep hill to climb” to return to the high-employment pre-pandemic of a year ago, said Lynn Reaser, economist at Point Loma Nazarene University in San Diego. The February unemployment rate is about double the 4.3% rate for February 2020, and the state has 1.6 million unemployed workers.
Myers and Su said that unemployment continues to disproportionately affect black women and communities. “Latin American and Asian American workers were hit hard on the front lines as essential workers. African-Americans have signed up to receive unemployment benefits at amazing rates, further evidence of the inequalities we must face to ensure a strong and equitable recovery, ”the statement said.
California authorities suspended requests to stay home for the regional coronavirus across the state in late January, and further restrictions were loosened regionally earlier this month when the state reached the goal of vaccinating 2 million residents in its most remote areas. disadvantaged. In Los Angeles County, restaurants, personal care salons and gyms have reopened indoors with limited capacity. In Orange County, Disneyland is planning to reopen with limited capacity and some restrictions on April 30.
With the gradual reopening of the economy, employment growth recovered in a sector that was most affected during the pandemic: leisure and hospitality. Restaurants, bars, hotels, sporting events and other activities in the sector accounted for 72% of the increase in jobs in February.
Economists said jobs would continue to return in general, noting that in February vaccinations were still limited and schools closed. The leisure and hospitality sector has a long way to go to recover the accumulated number of jobs lost during the pandemic crisis, with a drop of 689.3 thousand vacancies, or 33.9%, in relation to February of last year.
By reversing losses from previous months, California helped fuel national job gains in February, accounting for more than 37% of net jobs added in the U.S. during the month, according to an analysis by Beacon Taner Osman and Brian Vanderplas Economics in Los Angeles. Still, the state’s labor market remains behind the national, with the unemployment rate in the United States at 6.2% in February.
California has the third highest unemployment rate, after Connecticut, after Hawaii and New York.
UCLA meteorologists predicted earlier this month that the US and California economies will see near-record growth this year as the pandemic subsides due to the expansion of COVID-19 vaccination efforts and federal tax relief for businesses and workers. in difficulties. Experts say that job growth will be more uncomfortable, however: an initial increase in employment is expected as companies reopen, but some layoffs will be permanent and many people will find it difficult to return to the job market.
Many Californians are still not comfortable returning to work, which will affect employers’ ability to fill vacancies, said David Smith, professor of economics at Pepperdine Graziadio Business School. The state “has a lot of ground to cover,” he said.
The unemployment claims filed this month emphasize the recovery challenge ahead, said Michael Bernick, a former director of the state’s Department of Employment Development. The data released on Thursday showed 95,863 new claims made in California for the week ending March 20, which is at the lower limit of claims during the pandemic, but still more than double the rate in the pre-pandemic months.
Before the blockades began, in mid-March last year, the week ending March 7 registered 43,385 complaints. The following week, March 14, complaints rose to 57,606. The week ending March 21, 2020, saw 186,333 complaints.
Small business revenue and reopenings fell about 30% compared to January 2020, before the pandemic started, and have shown no signs of improvement since last fall, Bernick said: “Small business numbers are the most worrying ”.