California added 140,000 jobs in July — but COVID-19 restrictions may stall progress

California’s unemployment rate fell again in July, state officials announced Friday, but experts said many of the job gains have probably been wiped out as Gov. Gavin Newsom reimposes stricter controls on restaurants and other businesses to slow the spread of COVID-19.

The Employment Development Department reported that the statewide unemployment rate fell to 13.3% in July, down from 14.9% the month before.

California added 140,000 jobs in July and has regained 31% of the 2.6 million jobs lost when the initial stay-at-home orders were imposed in March, shutting down much of the economy.

Yet Sung Won Sohn, a business economist at Loyola Marymount University in Los Angeles, said the gains are going to prove to be temporary. The figures are based on surveys conducted the week of July 12. But that was just as Newsom rescinded much of his partial reopening of the economy, ordering the closure of indoor malls, indoor dining and other venues in Sacramento many other parts of the state.

“The job situation has deteriorated by the rising infection rate and the rollback of the economic reopening,” Sohn said. In many respects, Friday’s jobs report is “old news, not new news,” he said. A more accurate picture will emerge next month, when the August figures are released.

Sohn said the jobs picture is also being distorted by a major dropoff in the size of the labor force. Since February, he said about 700,000 Californians have dropped out of the job market. They’re not working but no longer counted among the unemployed, and Sohn said the coronavirus pandemic is likely a factor.

“It could be parents staying at home with their children,” he said.

For instance, Sacramento reported a decline in unemployment, from 12.8% to 11.5%, even though the region lost 1,200 jobs in July. About 1,500 people dropped out of the labor force last month in Sacramento.

Other regional unemployment rates:

• Fresno: 13.5%, down from 14.5%
• Modesto: 13.6%, down from 15%
• Merced: 14.5%, down from 15.6%
• San Luis Obispo: 9.9%, down from 11.5%.

Newsom’s office noted that the 13.3% statewide rate is still a full percentage point above the 12.3% peak reported during the Great Recession.

“A strong economic recovery is tied to keeping the social safety net funded so workers and small business owners can continue to make ends meet,” his office said. “A successful recovery also depends on Californians choosing to wear face masks, staying at home when possible, and following state and local guidance.”

This story was originally published August 21, 2020 at 10:29 AM with the headline "California added 140,000 jobs in July — but COVID-19 restrictions may stall progress."