The pace of job growth in the Gulf and California region continued to slow in April, a sign that economic recovery as a result of the coronavirus epidemic has begun to slow, according to a report released on Friday.
The Gulf region added 11,500 jobs in April, but those figures were a dramatic slowdown in employment growth in both February and March, according to the State Department for Employment Development.
California’s model was the same: the state received 41,400 jobs in April, a much smaller rise than employment growth in February and March, according to an analysis by the EDD report.
“The Gulf region and California seem to be losing some momentum,” said Mark Wittner, a senior economist at Wells Fargo.
The country-wide unemployment rate fell slightly to 4.6% in April, up from 4.8% in March, according to the state labor agency. This is the lowest level since February 2020, before state and local government agencies imposed large-scale business shutdowns to combat the spread of the coronavirus.
But even with last month’s improvement, California’s unemployment rate remains higher than the country’s 3.6 percent unemployment rate.
Santa Clara County added 4,300 jobs in April, while the San Francisco-San Mateo region added 4,900 jobs and East Bay received 2,100 jobs, the report said. All numbers were adjusted for seasonal variations.
Despite the alarming trend in the California labor market, Gov. Gavin Newsom said in a statement that the state had seen job growth in 14 of the past 15 months.
In addition, in the one-year period that ended in April, California and the Gulf region overtook the nation in terms of overall job growth. In the last 12 months, the labor market has grown by 5.6% in California, 5.8% in the Gulf region and 4.6% in the United States.
However, California and the Gulf region are lagging behind the nation when it comes to rebuilding jobs lost in March 2020 and April 2020 at the start of the pandemic. The United States has regained 94.6% of its lost ground, while California has regained 91.3% and the Gulf region has regained 79.9%, according to an analysis by EDD Statistics.
“More work is needed to boost the economy and offset the higher costs that families are currently facing,” Newsham said in a statement. “California’s record surplus of $ 97.5 billion is going straight back into the pockets of Californians and tackling our state’s most existential challenges, fostering growth and opportunity for all.”
Fiery inflation may have an effect on economic activity, as rising prices have eaten away at pocket books and undermined the purchasing power of the typical consumer. Prices in the Gulf region rose at an annual rate of 5% in April, and this year’s inflation is the highest in two decades.
In addition, rising wages – another factor in the sharp rise in inflation – could lead employers to reduce hiring due to higher labor costs.
The Gulf’s battered hotel and restaurant sector appears to be recovering, producing much of the region’s employment growth last month, according to seasonally adjusted figures calculated by Beacon Economics and the UC Riverside Center for Economic Forecasting using the EDD report.
Gulf hotels and restaurants added 9,100 jobs in April, a whopping 79.1% of all jobs created by the nine-county region last month, Beacon and UC Riverside found.
Retailers, whose operations were also brutalized during the pandemic, added 2,300 jobs in the Gulf region, while health employers cut 1,700 jobs.
Technology companies added 1,100 jobs in the Gulf area last month, according to estimates by Beacon and UC Riverside. Of these, 1,000 are in the San Francisco-San Mateo area and 600 in Santa Clara County. But in the East Bay, technology companies have cut 500 jobs.
Technology companies are gradually bringing back office workers. However, many large companies are adopting a hybrid approach that allows employees to work remotely during part of the work week.
“The new hybrid models will reduce the demand for space and related services,” said Russell Hancock, president of Joint Venture Silicon Valley. “This is happening at the same time as inflation and coincides with some very destabilizing international events. The result is a depressing effect on hiring.
Inflation and international unrest could threaten job recovery in the Gulf and California region, warned Michael Bernik, an employment lawyer at Dwayne Morris and a former EDD director.
“The country’s economy continues to recover, but is in danger of stopping or reversing,” Bernik said.
Bay Area, California job gains slow as post-COVID rebound wilts
