California’s job market is facing challenges, marked by a slowdown in job creation and a rise in unemployment. In stark contrast to the overall healthy job market nationwide, concerns are growing over California’s economic outlook.

According to the California Employment Development Department (EDD) on the 22nd, the state’s nonfarm employment in October stood at 18,090,200 jobs, a decrease of 5,500 from the previous month. While significant layoffs in Silicon Valley’s tech sector contributed to this decline, hiring in other industries helped mitigate the losses to some extent.

California’s unemployment rate rose to 5.4% in October, up from 5.3% in September and 5.1% in October 2023. This rate is notably higher than the national unemployment rate of 4.1% in October, creating a 1.3-percentage-point gap. Furthermore, California’s rate ranks as the second highest in the country, following Nevada at 5.7%.

The COVID-19 pandemic saw California’s unemployment rate peak at a record 16.1% in April 2020, but while it has since improved significantly, recent trends show deterioration.

Job Market Breakdown
In October, five of California’s 11 major industries experienced job growth, with education and health services adding the most jobs (+9,400), followed by financial activities (+2,600), trade/transportation (+2,600), and construction (+1,200).

However, declines were recorded in professional and business services (-8,300), information/government (-7,500), leisure and hospitality (-3,400), and manufacturing (-1,500).

The number of unemployed individuals in California reached 1,045,300 in October, up by 13,100 from the previous month and 54,500 from the previous year.

Southern California Trends
Southern California also showed signs of strain:

Los Angeles County: The unemployment rate rose to 5.9% in October, up from 5.8% in September and 5.3% in October 2023. Nonfarm employment increased by 37,600 jobs to 4,617,300, but unemployment grew by 7,000 to reach 300,000.
Orange County: The unemployment rate remained steady at 4.1% compared to September but was up from 3.9% in October 2023. Nonfarm employment increased by 11,400 jobs to 1,716,700, with notable gains in education and health services (+3,000), government/public sector (+2,900), and trade/transportation (+2,700).
National Comparison
Nationally, the unemployment rate in October was 4.1%, unchanged from the previous month but higher than the 3.8% recorded in October 2023. Nationwide job creation was also sluggish, with only 12,000 jobs added in October.

As economic uncertainties loom, California faces growing pressure to reverse these trends and align more closely with the robust national job market.

<Hwandong Cho>