California Unemployment Fell in August — But It's Still Way Above the National Average

See a map of unemployment rates by California county

California’s unemployment rate in August fell to 11.4%, a welcome drop from July’s rate of 13.3%, according to new monthly figures released Friday from the state Employment Development Department.

State employers added 101,900 non-farm payroll jobs last month, the department reported, based on its survey of 80,000 businesses. That means California has now regained roughly a third of the more than 2.6 million non-farm jobs lost in March and April as a direct result of the COVID-19 pandemic.

Despite that progress, August’s jobless rate is still significantly higher than the nationwide rate of 8.4%. Californians filed more than 2.8 million claims for unemployment benefits last month and continue to make up about a quarter of all Americans filing first-time claims.

“One thing that we’re seeing is that a significant portion of those who (initially) made first-time claims for unemployment and claimed they were furloughed, are now moving into the permanently unemployed,” said economist Jerry Nickelsburg, who directs the UCLA Anderson Forecast. “And that’s the damage that this recession has done. That’s going to take a while to resolve itself as people have to find new employers and maybe even new sectors.”

On the brighter side, nearly 16.6 million Californians were employed in August, a notable increase from the previous month. But that still amounts to almost 2.1 million fewer people with jobs than there were last year.

California’s leisure and hospitality industry has been hit hardest, by far, by pandemic-related job losses, with 633,000 fewer jobs than existed a year ago. Trade, transportation and utilities come in a distant second, with a decrease of 208,300 jobs, followed by professional and business services (down 159,200).

Although not in the top five hardest hit sectors, the state’s agriculture industry has also felt the pain, with 101,100 fewer farm jobs than last year.

“The bad news, but not just for California, is the sectors that have been hit the hardest are low wage, personal touch, kinds of sectors, like tourism and leisure and hospitality — bars and restaurants,” Nickelsburg said. “And that means inequality is going to get worse absent public policy to address that.”

One source of hope, Nickelsburg said, can been found in the state’s tech sector, which has been hit less hard than most other industries, as demand spikes for technology to enable more employees to work from home.

“California’s tech industry led us out of the last recession, it looks like it’s going to lead us out of this one,” he said. “So that’s some good news for California.”