California now has the highest unemployment rate in the United States, hitting 5.3 percent in February according to a new analysis of previous job data.
The state lost about 2,700,000 million jobs due to the COVID-19 pandemic, which the Associated Press directly attributes to Governor Gavin Newsom’s lockdown policies, writing that it “forced many businesses to close.” According to the California Employment Development Department, the state’s economy has added three million jobs since then, or 66,000 new jobs per month.
The Associated Press is attributing the high unemployment rate to a new report that reveals job growth was far slower in fiscal year 2023 than was previously thought.
California unemployment has become the highest in the United States with state's February data release pic.twitter.com/guIgzbcMgo
— MacroEdge (@MacroEdgeRes) March 23, 2024
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According to a new analysis of job data, which compares payroll records to federal job numbers, only 50,000 jobs were added in California from September 2022 to September 2023, a massive difference compared to the 300,000 reported previously.
For example, while the initial report claimed 9,900 jobs were added in July 2023, the new analysis reveals 41,400 jobs were actually lost.
“I think California’s economy is the leading edge of the national economic slowdown,” said finance and economics professor Sung Won Sohn of Loyola Marymount University.
The largest source of overestimated jobs was the professional services industry, which includes lawyers, accountants, and engineers, according to the nonpartisan research group Legislative Analyst’s Office.
Seven out of the eleven job sectors in California experienced losses in February 2023. The sector with the highest number of losses that month was construction, experiencing 9,600 jobs eliminated. The Californian Employment Development Department says the industry was sustained by the health care sector, particularly from acupuncturist and dietician offices, while the losses were chalked up to the effects of bad weather.
“The tech sector, especially major firms, over-hired in the first post-pandemic year, and has been shedding jobs since,” said former director of the Employment Development Department Michael Bernick. “The (San Francisco) Bay Area is the new epicenter of Artificial Intelligence start-ups. But these start-ups so far are creating a small number of jobs.”
California’s annual budget is experiencing its second multibillion dollar deficit in a row, but the Newsom administration and the Legislative Analyst’s Office disagree on the amount ($37.9 billion vs. $73 billion).
Shane Devine is a writer covering politics, economics, and culture for Valuetainment. Follow Shane on X (Twitter).
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