Governor Newsom asserts job expansion, while federal reports indicate a loss of 156,300 jobs in the initial six months of 2024.
In a surprising turn of events, California experienced a significant decline of 156,300 jobs during the initial half of 2024, as revealed by recent federal quarterly payroll data, challenging the assertions made by Governor Gavin Newsom regarding the state’s job growth.
Across the country, lawmakers frequently reference encouraging initial employment survey figures, which tend to be notably adjusted downward when more precise payroll data is released.
California’s payroll figures for June showed a total of 17,881,600 jobs, compared to 18,037,900 jobs in January. This indicates a loss of 156,300 jobs in the first half of 2024, based on the latest quarterly payroll data that encompasses 95% of jobs.
The federal preliminary, sampled survey data referenced by Newsom indicated 18,054,300 jobs in June, suggesting that the preliminary survey overestimated California’s job count by 172,700.
This situation stands out as employment usually fluctuates with slower winter months followed by a more active summer period; in 2023, California experienced an increase of 50,800 jobs during this period.
Recently, Newsom’s office highlighted the economic expansion in California, referencing initial job statistics.
“California is the strongest economy in the nation, with one of the country’s most equitable tax systems, and standing ahead of all other states,” said Newsom’s office in a statement. “Between January 2022 and June 2024, employers in California created more than 672,000 jobs.”
With the final, adjusted payroll data in hand, the jobs growth in California since January 2022 now stands at 499,600 jobs, reflecting a decrease of 172,000 jobs compared to what was previously announced by Newsom.
The mandatory stay-at-home order in the state remained in effect until January 25, 2021, as decided by Newsom. Numerous cities in California, including Los Angeles, upheld pandemic restrictions well into 2022, indicating that much of the job “growth” has stemmed from the rebound of positions lost during lockdowns.
Jason Sorens, an economist at the American Institute for Economic Research, has pointed out that the Current Employment Statistics Survey has recently been greatly exaggerating job numbers, and this concern transcends political affiliations.
“It’s a national problem. The rebench data show that nationally, the CES overstated jobs by 942,000 in June 2024, the latest available month,” said Sorens to The Center Square. “On average since October 2023, the CES has overstated jobs nationally by 340,000 each month.”
Sorens highlighted that the most significant overestimates of employment as a share of the workforce occurred in Nevada, Missouri, South Carolina, and the District of Columbia, emphasizing that smaller states tend to experience larger fluctuations.
“In general, smaller states are prone to bigger misses, as a percentage of actual employment, because their economics are more volatile and surveys are less likely to capture the accurate population of business establishments,” continued Sorens. “The CES business survey is subject to some of the same problems and limitations as political surveys: nonresponse bias and general sampling error.”
The nonpartisan, state-funded Legislative Analyst’s Office in California has indicated that these discrepancies will lead to the adoption of a hybrid employment measure for monitoring the state’s job statistics.
“The monthly survey has overestimated net job growth by 25,000 jobs per month on average [since mid-2022],” wrote the LAO. “Going forward, our office will focus on a hybrid measure of real-time employment changes that averages the monthly business survey and the monthly household survey (which has tracked final jobs figures more closely over the past two years) as part of our work to track the state’s labor market.”
