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California adds 42,900 jobs; unemployment rate drops to 4.3%

California’s economy added 42,900 payroll jobs in May versus 41,400 in April, according to the state Employment Development Department. In May, the Golden State’s unemployment rate fell to 4.3% versus April’s 4.6%. The above data comes from two separate monthly federal surveys, one of businesses and the other of households.

The U.S. unemployment rate remained at 3.6% in May, matching April. The national economy grew 390,000 new hires in May compared with 428,000 in April. In May, California accounted for 11% of the U.S.’s nonfarm payroll employment growth versus 14% in April.

The state has lowered unemployment to pre-pandemic rates.

According to the state EDD, “California has now regained 93 percent (2,565,100) of the 2,758,900 nonfarm jobs lost during March and April of 2020 due to the COVID-19 pandemic.

At 869,300 jobs, California had the largest absolute year-over seasonally adjusted job increase in the nation in May 2022. California has enjoyed month-over gains in nonfarm jobs in 15 of the past 16 months totaling a 1,481,800 jobs gain over that period.

Eight of California’s 11 industry sectors gained nonfarm payroll jobs in May, matching April’s tally. The information sector in May added 8,800 new hires. This job growth was the result of increases in film and sound recording payrolls, according to the EDD.

Leisure and hospitality employers also added 8,800 new hires in May versus 21,100 in April. This sector suffered massive job losses during the coronavirus pandemic.

Meanwhile, trade, transportation, and utilities employers had the biggest month-over job loss of 3,700 workers, due to reductions in retail trade such as general merchandise stores. Construction employers added 7,100 new hires, a turnaround from April’s loss of 13,200 jobs.

Economic headwinds exist that could weaken the California economy. Inflation (rising prices and wages) is at a 40-year high. At the same time, the Federal Reserve, the nation’s central bank, is raising interest rates in a bid to slow the growth of inflation.

California is investing about $2 billion in new private investment over the next five years, the Governor’s Office of Business and Economic Development announced today. “Investing in innovation works, and no place does it better than California — solving our most existential challenges with creativity and the technology of the future,” said Governor Gavin Newsom in a prepared statement.

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