According to state figures, the overall unemployment picture did not get a good start to the New Year. Not only did employers in Los Angeles County cut jobs, but there were also fewer jobs on employer payrolls than originally estimated for the month of December.

Unemployment in California

According to this report, Los Angeles County’s job rate dropped to 5.8 percent in January as employers cut 88,000 jobs. The Employment Development Department further reported that there were 42,000 fewer jobs on the payroll for the month of December than was originally estimated.

This is partially due to the fact that there were 18,000 fewer people in the labor force in January. Furthermore, a greater number of county residents reported that they either gave up looking for a job or they simply decided to return to school. As such, the labor force of 4.97 million was smaller in January of this year than it was the same time last year. Overall, the unemployment rate in the county was the same as the state’s unemployment rate, which was still much higher than the 4.9 percent national rate for the month of January.

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Riding Out the Drop in Payroll

Generally speaking, January experiences a drop in the number of people on the payroll as employers let go of their holiday hires. This is particularly true within the retail sector. Nonetheless, the drop of 88,000 payroll jobs was a sharper decline than usual. In fact, when adjusting for the seasonal factor, the drop was about 14,000 jobs for the month of January.

The drop in people on the payroll may be at least partially due to the fact that employers had a more cautious outlook in response to the volatility of the equity market earlier in the year. One possibility is that there was a slowdown in hiring in response to the volatility, while another possibility is that employers were so busy in December that they retained their holiday hires into January. Clearly, this would result in a bigger drop in contingent worker positions during the month of January. Specific sectors that reported a huge drop were:

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•Retail: Down by 18,800

•Leisure/Hospitality: Down by 9,900

•Entertainment: Down by 9,300

Ultimately, the total payroll employment in Los Angeles County during the month of December did not top at 4.4 million as was originally reported in January. Instead, total payroll employment came to just over 4.37 million.

While the employment picture was largely negative, there was a bright spot with the year-over-year payroll figures. Overall, the county gained 93,000 jobs, resulting in a 2.2 percent growth between the months of January 2015 and January 2016. Those that saw an increase included:

•Health Care / Social Assistance: Up 27,100

•Accommodation / Food Services: Up 19,900

•Professional / Business Services: Up 12,400

The only sector to report a significant net drop in jobs was manufacturing, which saw a long-term decline in net jobs of 7,000.

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(all data current as of 5/29/2017)

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