State has a surprisingly solid job market
Bosses seem to like hiring in the state they like to hate. And that meant 2022 was a solid year for California's job seekers.
My trusty spreadsheet, filled with 47 years of annual federal jobs data compiled by the St. Louis Fed, tells me that California bosses added 842,000 employees in 2022.
How big was that? Well, this new “staff” equals roughly all the workers in New Mexico or Idaho.
And it was the most workers added by any state, a ranking California has earned in 25 of the past 47 years. Texas was No. 2 at 732,000 and then came Florida with 477,500 new workers.
Yes, California's employment market wasn't perfect. Maybe other states fared better.
Of course, there was plenty to worry about — the muddy 2023 economic outlook or a rash of year-end layoff notices. And we can debate on another day the numerous ways the Golden State might polish its jobs picture and business climate.
Today, let's simply celebrate the 2022 accomplishments of the state's employers and employees alike.
Look at all those 2022 job additions in California. They represent 14.4% of all hires nationally in the year. That's an above-par slice of job creation as California has created 13% of new U.S. jobs since 1976.
Fast pace
California's 2022 hiring spree equaled a 5% annual growth rate, part of a rebound from job losses in the early days of the pandemic era.
In the past half-century, California had faster job creation in only three years: 1977 through 1979. Yes, that's when the underappreciated Jimmy Carter was president.
Also, 2022's 5% growth rate was the fourth-fastest hiring pace in the nation behind Nevada at 6.5%, Texas at 5.8% and Florida at 5.4%.
That No. 4 ranking is the highest yearly grade California has earned for its hiring pace in the past 47 years. The previous highest performance rank was the fifth-place showing in 2013, as the state's economy was emerging from the rubble of the Great Recession.
And for all of the businesses bellyaching about California's unfriendliness to employers, 2022's wave of added personnel boosted California's total employment to 17.6 million last year — as usual, the largest job market in the nation.
Equally eye-catching is that this record-sized workforce meant California had 11.6% of all U.S. workers in 2022, the state's largest share of national employment in the past halfcentury.
Unemployment cut
The hiring spree helped lower joblessness statewide.
California's unemployment rate averaged 4.4% in 2022 — down from 7.4% the previous year and 10.3% in lockeddown 2020.
Last year`s joblessness was the thirdlowest level for the state in the past 47 years — only 2019's 4.1% and 2018's 4.3% were better.
Oddly, perhaps, California's 4.4% unemployment in 2022 was the nation's ninth-highest jobless rate.
Historically speaking, California's unemployment has run well above the rest of the nation for a host of reasons including its concentrations in volatile industries such as technology, real estate, agriculture and hospitality.
Ponder the fact that California's best years on the national unemployment scorecard over nearly a half-century were 1986 and 1987. That's when the state ranked 25th best for unemployment rates.
Yes, No. 25 is California's No. 1 year.
Curious combo
There's a big challenge being a California worker: the state's mix of typically speedy job creation along with lofty unemployment.
Start with a 2022 oddity: The jobgrowth pace (5%) topped unemployment (4.4%) for the first time in 47 years. Or mull the long-term picture. California jobs grew at a 1.73% annual average rate since 1976 — 16th-best tempo among the states and topping the 1.45% U.S. pace. But in that same timeframe, California unemployment averaged 7.2%, the sixth-highest among the states.
That curious combination speaks to the mercurial nature of the state economy that features numerous peaks and valleys. Brisk job creation requires risk, and sometimes entrepreneurs and fastgrowth companies strike out — forcing employees to find other gigs.
Just think about the historic aboveaverage joblessness among the nation's five fastest-growing job markets over the past half-century.
No. 1 Nevada — with 3.7% annual job growth since 1976 — has averaged 6.7% unemployment (13th-highest nationally) over 47 years. And No. 2 Arizona's 3.1% average hiring pace was tied to 6.2% unemployment (22nd-highest nationally).
No. 4 Florida's 2.7% job growth came with 6.1% unemployment (24th-highest) and No. 5 Texas' 2.4% hiring pace ran along 6% unemployment (25th-highest).
The outlier was No. 3 Utah, with 2.9% average job growth but only 4.7% unemployment (ninth-lowest).
Or mull over Nebraska. Its 3.4% historic unemployment rate is the nation's low. But its hiring pace since 1986 of 1.32% yearly is a below-par 28th best.
You see, bosses want to operate in places where's there an ample pool of job candidates. And unemployment can be seen as a measure of worker supply.