California still losing jobs, but there’s hope

Despite loss of 70,000 jobs in January, jobless rate dips slightly as economic recovery may be in offing.

California lost close to 70,000 jobs in January as the coronavirus pandemic stretched into the new year, but the unemployment rate dropped slightly, to 9%, as more people stopped looking for work amid another round of state-imposed lockdowns.

Numbers released Friday by the Employment Development Department show the nation’s most populous state lost 69,900 jobs in January. Revised numbers from December show 145,300 jobs were lost over those two months, slowing the recovery. California has regained about 39% of the more than 2.7 million jobs lost in March and April 2020 when the pandemic took hold.

But since January 2020, more than 768,000 people have stopped looking for work, a number likely driven by the demands of caring for children during virtual learning and people seeking advanced degrees as they wait for the economy to improve.

The biggest losses were in the leisure and hospitality sector, which includes restaurants and hotels that have been hit hardest by public health orders restricting travel and dining. The sector lost 70,600 jobs in January, down nearly 800,000 jobs since January 2020.

The job numbers released Friday are based on surveys conducted the week of Jan. 12, when the state was averaging more than 50,000 new COVID-19 cases per day and hospital intensive care units were at full capacity in Southern California and the San Joaquin Valley.

Now, California is averaging less than 4,000 new cases per day and hospitalizations have declined more than 84%. Gov. Gavin Newsom’s administration is loosening restrictions, saying theme parks like Disneyland can reopen and fans can attend Major League Baseball games at limited capacity starting April 1. Disneyland has said it likely won’t reopen until late April.

Los Angeles County, the nation’s most populous with more than 10 million residents, is set to ease restrictions soon that could allow limited indoor dining and movie theaters and gyms to reopen.

Meanwhile, more public school districts are announcing plans to get students back into classrooms, with the state having administered nearly 11 million doses of the COVID-19 vaccine.

“The vaccines are the best economic stimulus, allowing restrictions to ease,” said Sung Won Sohn, a professor of finance and economics at Loyola Marymount University. “There is a tremendous amount of pent-up demand, combined with improving weather, will allow the economy to grow more rapidly.”

But that recovery hasn’t shown up yet in the numbers. Job postings in California, a sign of employers’ willingness to hire, declined the first week of March after a sharp increase in February. Unemployment claims increased by more than 16,000 last week, to 105,861.