Unemployment claims tumble in California — but recovery is far off – Daily Democrat


First-time unemployment claims filed by California workers have fallen to their lowest levels since coronavirus-linked business shutdowns began, dropping below 100,000 for the first time in 10 months, federal officials reported Thursday.

Despite the improvement, experts warn that California workers won’t be getting back the jobs they have lost in huge numbers in the wake of lockdowns that were implemented to ward off the spread of the deadly bug.

“The numbers should be looked at with some skepticism,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state Employment Development Department. “The drop in claims is at odds with other indicators. Job posting numbers have not shown an increase. Small business revenues have not improved.”

Just a few days ago, the EDD reported that during December California had lost 52,200 jobs, while the Bay Area lost 14,300 jobs.

For all of 2020, California lost a staggering 1.41 million jobs, while Bay Area employers shed 360,300 jobs.

Still, it’s possible the worst of the economic catastrophe from the coronavirus might be over — although a major jobs rebound isn’t anywhere close.

“We may have seen the peak of the layoffs at this point,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “It is the beginning of a slow recovery.”

California workers filed 53,300 initial claims for unemployment last week, a decline of 63,900 from the prior week, the U.S. Labor Department reported.

That’s the lowest weekly number since March 7, the last week before state and local government agencies imposed wide-ranging business shutdowns to fight the coronavirus.

During the week that ended on March 7, jobless claims totaled 43,400, which represented a typical amount for weekly unemployment filings in California before the virus began to rattle the economy.

The latest figure also represents the first time that the weekly filings have fallen below 100,000 since the onset of the business lockdowns in California.

During the two most recent weeks, jobless claims statewide have declined by about 129,300.

Nationwide, workers filed 847,000 initial unemployment claims the week that ended Jan. 23, a decline of 67,000 from the week that ended Jan. 16, according to the Labor Department.

An analysis by this news organization of the recent trends for unemployment claims in California suggests that the improvement has been going on for a few weeks now.

Using a moving average, which smooths out weekly volatility in the unemployment numbers, the average weekly number for the four most recent weeks was about 128,500 initial claims in California for the four weeks that ended Jan. 23. That’s a decline of about 28,900 from the four-week average of 157,400 for the month-long period ending on Jan. 16.

Recent decisions to ease business shutdowns could spur some tiny levels of hiring.

“There will be some reopenings for restaurant, retail, personal services such as nail salons and barbershops,” Levy said. “We may have seen the worst of the unemployment claims. But it will be a long time before everyone gets their jobs back.”

Many people might never get their jobs back or even work in the same industries they exited.

“There could be a permanent restructuring of the leisure and hospitality sector,” Bernick said.

Still, the current numbers of jobless claims, while an improvement, are still much higher than the weekly numbers in California during healthy economic times.

The most recent number of 53,300 initial unemployment claims in California for the week that ended on Jan. 23 is about 19% higher than the weekly average of 44,800 jobless claims that occurred during January and February of 2020, the final two months before the business shutdowns began in March 2020.

The longer-term prospects for the economy in California point to a slow and painful improvement for the job market statewide and in the Bay Area, analysts suggested.

The widespread devastation and economic destruction in the leisure and hospitality industries — which include hotels, restaurants, arts, and entertainment — will hobble a swift jobs upswing, experts believe.

“We are looking at a much more gradual recovery than first hoped,” Bernick said. “A lot of jobs that were lost are going to be lost permanently, especially in leisure and hospitality.”


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