Employment growth remains a bright spot in area's economy

Update since Friday: No new indicators over the weekend, but a SB Sun article (Allen Buchanan, online edition Monday June 5) outlined the vicious impacts of inflation throughout the economy. Inflation continues to hit new records out here; I’ll have more to say about it in this Friday’s newsletter. Unemployment claims remain low and the national job situation remains strong, quelling fears of an upcoming recession.

As of April, regional nonfarm employment stands at 1.64 million workers. Not only is this above where we were before the pandemic (at about 1.57 million workers), it is also just 1.2% shy of pre-pandemic trend (see graph below). In other words, the labor market has recovered 98.8% of the capacity it had prior to the pandemic.

Just for reference, Los Angeles is still 4.4% below pre-pandemic trend and hasn’t even recovered all the losses from two years ago (see graph below). The difference between the two graphs is striking – our recovery has been much smoother and more successful. This is the graph that started this newsletter 1.5 years ago, and I’m glad to say I might not need to write about it for much longer.

The region’s employment growth reflects gains in most major sectors of the IE economy – trade and transportation (7.9% year-over-year growth), professional and business services (4.0%), leisure and hospitality (14.4%), as well as the public sector (5.5%). Only construction appears somewhat weak (down 0.2% year-over-year).

The employment growth is also reflected in higher earnings for the area’s workers. Earnings grew at 3.5% year-over-year; slower than a few months ago but still impressive progress.

Stay tuned for an inflation update this Friday.