Federal Cali Data On Jobs Shows Losses
California has been hit hard by job losses this year, leading the nation in unemployment with over 480,000 residents losing their jobs since the beginning of 2023.
This number is a 20 percent increase from the same period last year. The tech sector, in particular, has been the most affected, with major companies like Tesla and Google announcing significant layoffs. The latest data from the Federal Reserve of Economic Data (FRED) shows a steady rise in the unemployment rate in California since August 2022, reaching a staggering 5.3 percent in February 2023.
This trend of job losses has continued into the first quarter of 2023, with 931,700 Californians left jobless. This is a concerning statistic, especially considering that the state's unemployment rate has held steady at 5.3 percent for the past few months. In March, four out of the eleven job sectors in the state reported job losses, with the construction industry being hit the hardest. Severe storms and inclement weather caused a decrease of 5,300 jobs in this sector.
The private education and health service sector, on the other hand, saw a significant increase in jobs, primarily driven by the growing demand for in-home support service workers. However, these gains were not enough to offset the overall job losses in the state. The national unemployment rate for April was 3.9 percent, a slight increase from the previous month. This increase is attributed to the 303,000 jobs added in March and 175,000 in April, as reported by the Federal Reserve.
The tech industry has been the most affected by job losses in California, with a staggering 53,600 jobs lost in the past year. This number surpasses any other job sector's losses, showing a worrying trend for the state's economy. In April, Tesla announced mass layoffs, affecting over 6,000 employees in Texas and California. The company's CEO, Elon Musk, has hinted at further job cuts, with plans to reduce the company's global workforce by 10 percent.
Other major tech companies, such as Apple, eBay, and Google, have also implemented significant job cuts in 2023. In April, Apple let go of 614 employees in California after abandoning their electric car project. In January, eBay announced plans to reduce their workforce by 9 percent, affecting approximately 1,000 full-time employees.
The slowdown in the job market has also had a significant impact on the state's budget, which now faces a multibillion-dollar deficit for the second year in a row. The governor of California, Gavin Newsom, has proposed to curtail spending by over $30 billion on illegal immigrants, education, and climate-related efforts, among other priorities. This decision has faced criticism from both sides of the political spectrum, as some argue that the state's already struggling economy cannot sustain further spending cuts.
Overall, the latest data from FRED paints a concerning picture for the state of California and its job market. The increase in job losses, particularly in the tech sector, has had a ripple effect on the state's economy, with the Governor proposing significant spending cuts to address the growing deficit.
As the state continues to grapple with the impact of the pandemic and other economic challenges, it remains to be seen how these job losses will be addressed and what steps will be taken to stimulate job growth in the future.