Jobs report for April 2023 (Inland Empire) - sluggish growth continues
There is a bright spot in the latest numbers - wages are picking up again after a 1-year lull
Inland Empire (total nonfarm) net jobs grew by just 0.7% in the year between April 2022 and 2023. There were continued declines in notable sectors like Manufacturing (-3.6%) and Wholesale Trade (-3.9%) which dragged us down. On net, I.E. manufacturing has lost over 2,000 jobs since 2020. It’s not a good sign that jobs in logistics have shrunk in recent months.
With the latest statistics, the Inland Empire is no longer the leading metro area for job growth in Southern California. Both San Diego (+2.8% growth in total nonfarm jobs) and Los Angeles (+2.4%) are now growing at a faster clip.
The bad news doesn’t stop there. A few months ago, I confidently wrote that IE job growth was back to pre-pandemic trends. Unlike other areas which hadn’t recovered all the jobs they lost during the pandemic, the I.E. had recovered all jobs lost and returned to the pre-pandemic rate of job growth. This is no longer the case: we’ve been below the pre-pandemic trend in job growth since the start of 2023. See the graph below.
I mentioned that there are some bright sides in April’s data release. Wage growth has picked up. While weekly hours are down (to 35.2, from 35.7 a year ago), it’s nice to see the 6.4% year-over-year wage growth statistic posted for April 2023: it’s the first time in a while that wage growth has been higher than inflation. Since this number has steadily increased through 2023, I expect it to continue for the time being.
Curiously (or perhaps not so curiously), wage growth appears to be picking up again precisely as logistics job growth cools down and government and education/health job growth picks up steam. Is logistics helping or hindering the area’s workforce? Many will argue the latter, although it is true that between Q1 2020 and Q1 2022, wages in that sector grew by 12.1%, higher than the all-industry overall growth of 8.8%. The data used to answer that question won’t be released for a while.