SB and Riverside County unemployment rates rise to 4.0%
Stats are still looking positive year-over-year, but on some metrics, we've started to slow down
Update since Friday: on Monday, Beacon Economics’ Dr. Christopher Thornberg weighed in on the question everyone has been asking – “are we in a recession?”. Beacon is an economics consulting agency out of Los Angeles and Dr. Thornberg is the region’s most highly sought-after speaker and economic analyst. Dr. Thornberg’s answer is “no” (or at least, “not yet”). Read the whole post here; it’s highly recommended. His thesis is that the negative GDP growth we’ve witnessed over the last two quarters (Q1 and Q2 of 2022) has to do with a decline in capacity from the production side in an economy that can’t keep up with all the consumer demand. For an alternative view that says we are in a recession (illustrated by declining profitability on investments; also highly recommended), see here. I’ll have more to say about each side of the argument on a future special topics post.
This article is on the latest household survey results from the Bureau of Labor Statistics. The household survey is used to calculate the unemployment rate and to measure how many people are currently in the labor force.
The unemployment rate in San Bernardino and Riverside Counties both edged up slightly in June to 4.0%, from 3.4% in May. Because these numbers are not seasonally adjusted, and because 4.0% is still very low, they are not any major cause for immediate concern. Indeed, the region’s unemployment rate has been halved over the last year (it was 8.4% in June 2021) and has trended downward. See here for a map of current regional unemployment rates by city in the IE, by Paul Vaccher and Michael Goss.
Los Angeles’ unemployment rate in June was 5.2% (down from 10.0% a year ago) and Orange County’s was 2.9% (down from 6.9% a year ago).
As many of you know by now, when considering statistics from the household survey, this newsletter likes to track labor force growth. Labor force growth measures changes in the rate at which people are participating in the labor force. Many labor market analysts track this at the regional and national level (see here for a recent example; this indicator is widely tracked on both ends of the political spectrum; see this National Review article).
As can be seen from the chart, all three counties have experienced a slowdown in labor force growth since March of this year. But of the three counties, only San Bernardino’s labor force is above the level it was at in January 2020, indicated by an index level higher than 100 (102.2 means 2.2% above January 2020 levels; values for Los Angeles and Orange are 95.4 and 97.7 respectively). Riverside, not pictured here, looks very similar to San Bernardino.