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Wednesday, May 18, 2022

LA County Unemployment Rate Falls to 8.4% in December

Los Angeles County’s unemployment rate fell to 8.4% in December from 8.9% in November and 9.4% in October amid robust hiring that saw employers in the county add 22,000 payroll jobs, according to state figures released Jan. 21.

The plunge in the unemployment rate — a full percentage point in two months — is due both to employers adding jobs and fewer people in the labor force. According to figures from the state Employment Development Department, the size of the labor force fell by 10,000 in December to 5,064,000 as many L.A. County residents dropped out of the workforce to care for children or family members or wait until after the holiday season to improve their job prospects. 

December’s drop followed a decline of 9,000 in November. Nonetheless, December’s 8.4% unemployment rate is the lowest since March 2020 and is a significant improvement from a year ago, when county’s unemployment rate was 12.6%, and it was less than half the peak of 18.8% reached in May 2020 at the maximum extent of the pandemic-related shutdown of much of the economy.

Yet L.A. County’s unemployment rate continued to lag statewide progress, where the rate stood at 6.5% in December. And it was more than double the national unemployment rate of 3.9%.


The EDD also released a breakdown of unemployment rates for cities within the county; those rates differ from the countywide average because they are not adjusted for seasonal factors like holiday hiring. The two largest cities, Los Angeles and Long Beach, posted seasonally unadjusted rates of 6.4% and 6.7% respectively in December. Among cities with at least 10,000 people in the labor force, Lancaster had the highest unemployment rate at 9.7%, while Lomita had the lowest at 3.3%.


Meanwhile, employers in L.A. County reported a net 22,000 more jobs on their payrolls in December than in November, about half the 43,000 payroll job gain for November. Nonetheless, the county now has gained back 537,000, or 70%, of the 773,000 jobs lost during the spring 2020 pandemic-induced lockdown of the economy. But it’s still roughly 235,000 jobs short of the Feb. 2020 level, just before the shutdown.


December’s gains were spread across all of the county’s 11 major industry sectors. But unlike most Decembers, retail hiring did not post the largest jobs gain. Instead, the largest gain came from an unusual source: courier and messenger services, which gained 5,100 jobs on the month, considerably more than brick-and-mortar retail’s 3,700 jobs. On a percentage basis, the gap was even more stark: Retail hiring grew by 0.9% in December from November, while courier and messenger services grew by 8.7%.


The EDD noted in its release that the courier and messenger services category includes the delivery of parcels, which would seem to indicate a huge surge in online orders that had to be delivered to people’s homes. 
This also explains in part why the EDD’s seasonally adjusted payroll employment figures for all industries in December showed a gain of 27,900 jobs from November, considerably higher than the 22,000 unadjusted job gain figure.

Since December of last year, the county gained a net 286,400 payroll jobs for an increase of 7%, a slightly faster growth rate than the 6.1% growth reported between November 2020 and this past November. The December-to-December comparison represents the 2021 calendar year, which means the county gained 286,000 payroll jobs in 2021.


However, these figures are preliminary. In early March, the EDD will issue its annual benchmark revision; it’s likely that 2021 job gain figure of 286,000 will see a substantial adjustment up or down.
Using the preliminary figures, the accommodation/food services sector gained the most payroll jobs in 2021 (up 84,700) between December 2020 and December 2021, followed by professional/business services (up 38,500 jobs) and arts/entertainment/recreation (up 30,900 jobs). The motion picture/sound recording industry gained 16,400 payroll jobs over the past year.

Howard Fine
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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