The I.E.'s Employment situation for September
Catching up with you all
…And we are back! I apologize for the pause in posts. I am working on some new features of the newsletter, and so I needed to take some time to plan for those. How is everyone doing? Leave a comment and let me know if there’s anything you’d like to see me write about over the coming weeks.
Here are the highlights from today’s post:
Inland Empire job growth and unemployment rates continue to reflect a healthy labor market
While we are still not back to the pre-pandemic job trends, we are closer than other nearby areas
Wages and hours continue to be a sore spot for area workers
While I was on my break, the region’s September labor force statistics were posted, and it was (generally) good news. Total nonfarm employment in the Inland Empire expanded 5.8% over the past year and the unemployment rate was pushed down to 3.9%, down from 6.4% a year ago. The Leisure and Hospitality sector continues to post strong job gains, and employment in that sector is now above the pre-pandemic level. Professional and Business Services (6.3%), as well as Trade, Transportation, and Utilities (7.0%) also posted high annual job growth in September. All of this is great news.
An indicator that I have tracked for a while (it’s kind of my “pet project” as I don’t see a lot of other people writing about it) is job growth relative to pre-pandemic trend. My argument here is that our benchmark should not be whether we’ve recovered all the jobs we lost during the pandemic, but rather, whether we’ve resumed the level and pace of job growth that we were trending toward before the pandemic took place. In light of this observation, I present the following three charts, comparing regional performance to L.A. and Orange metro areas.
According to these charts, the I.E. is only about 1% below the number of jobs suggested by the pre-pandemic trend. This statistic favors well compared to L.A., which is 3.8% below trend, and Orange metro area, which is 3.9% below trend. These statistics are very important: they show that a region’s unemployment rate does not tell the whole story. The other metro areas have seen a much larger drop in total labor force since the pandemic, meaning their jobs numbers are lackluster compared to ours. The other areas have not even recovered all the jobs they lost during the pandemic (compare where the green line is on each graph now, compared to where it was when it intersected the black line).
My final point concerns wages and hours, which continue to perform dismally. Indeed, average weekly hours were down to 35.4 in September 2022 (from 36.4 in September 2021). And average hourly wages were up to $28.71 from $28.56 a year ago, representing a 0.6% increase that pales in comparison to the 8.4% rise in the cost of living over the same period. See the chart above, which shows how earnings have literally “flatlined” since mid-2021.
To be sure, the region is creating jobs and that’s a great thing. But the stagnant pay for area workers will not help generate the kind of robust economic growth we need to keep the economy growing sustainably.