April 2023 UI Claims update
I am closely watching unemployment rate trends throughout the region, and I’m keeping an eye out for any signs of a slowdown. Unemployment rates for March 2023 were above their March 2022 levels for many SoCal counties, but it could be a temporary phenomenon.
What do we know about April 2023?
It’s still too early for numbers from the BLS. But the “new/initial Unemployment Insurance claims” data from California’s Employment Development Department (EDD) does have April 2023 statistics available. Here is what we know:
Initial UI Claims in the major SoCal counties of San Diego, Los Angeles, Orange, San Bernardino, and Riverside are all changing very slightly. There is no noticeable upward trend in new claims for unemployment insurance in the region. See the San Bernardino County chart below.
Another way to track these statistics is to look at changes in the 4-week average in them over the last two available weeks of data. Across all five counties mentioned above, there was a decline in the 4-week average in UI Claims between the week ending May 6 and the week ending April 29, which actually suggests some improvement in the situation. The largest drop was in Orange County, which saw a 3.8% decline. But all five counties saw a decline of at least 1.1%.
Another angle suggests that we still need to be cautious about future conditions. See the chart below. Industry-level breakdowns in who filed for new UI Claims shows year-over-year increases in San Bernardino County in Construction (301 in week ending May 7, 2022 vs. 379 in week ending May 6, 2023 – see the green area) and Transportation and Warehousing (301 in week ending May 7, 2022 vs. 364 in week ending May 6, 2023 – brown area). Again, these are small numbers to begin with, but they do suggest some weaknesses in two key regional sectors.
The signals continue to remain mixed on future labor market conditions, but with all this said, I am confident that unemployment rates will remain flat or possibly decrease slightly in April 2023, compared to March 2023 and April 2022.