This is an update based on the March 2023 BLS “Local Area Unemployment” statistics. Total unemployed workers are now higher than they were a year ago in all Southern California counties except for Los Angeles. The biggest increases in the number of unemployed workers occurred in Imperial (+32.5%) and Kern (+24.1%) County. Riverside (+8.9%) and San Bernardino (+6.3%) had “middle of the pack” increases, while the smallest increases were in Orange (+3.1%) and San Diego (+3.3%) County.
The increase in the number of unemployed workers caused unemployment rates to go up – not by a lot, but by enough to cause year-over-year changes to be higher in all counties except for Los Angeles. See the chart below.
Between March 2022 and 2023, Los Angeles’ total unemployed decreased by 3.6%, which caused their unemployment rate to decline from 5.2% in March 2022 to 5.0% in March 2023. Is this a sign of a strengthening regional economy in the midst of general labor market decline? It appears so. For example, while the BLS reported that Los Angeles’ labor force also declined, the amount (around 7,000 workers) was not enough to keep the unemployment rate up. In other words, the drop in unemployed workers in Los Angeles was caused, to a very limited extent, by labor force exits and was much more an effect of higher number of employed persons.
This thesis is supported by the establishment data released earlier last month. Los Angeles metro area net jobs grew by 2.5%, compared to (for example) the Inland Empire’s 0.4%.
You can be sure that we will continue to monitor new unemployment insurance claims, which provide the most up-to-date information about whether we are headed for a recession. Stay tuned.