California’s unemployment rate in April was much higher than previously thought, state figures released Friday showed, representing a staggering job loss not seen since the Great Depression as businesses struggle under a stay-at-home order meant to slow the spread of coronavirus.
State officials announced last month that California’s unemployment rate was 15.5% in April. But in announcing May’s figures the state Employment Development Department said the April rate actually was 16.4%, a remarkably large adjustment the agency said was because of “rapidly-evolving data.”
The change meant the unemployment rate in May was a slightly lower 16.3%. Several hours before the state announced its figures, the U.S. Bureau of Labor Statistics had released its national data that did not include the April adjustment for California and so it initially appeared the state’s rate had gone up,
Instead, California added 141,600 jobs last month after losing an incredible 2.4 million jobs in April. The state agency noted the numbers reflect job losses “never before seen in California’s history” using the current formula for calculating job losses that has been in place since 1976.
“All of these numbers are way off the charts from the monthly job reports we’ve had basically for the past 40 years,” said Michael Bernick, the former director of the California Employment Development Department and an attorney with the Duane Morris law firm. He said under normal circumstances a monthly adjustment would be 0.3% at most. Friday’s adjustment was more than double that.
California’s unemployment rate remains far higher than the 12.3% rate the state hit at the height of the Great Recession a decade ago.
Nationally, 38 states saw their unemployment rates decline since April, according to the Bureau of Labor Statistics, as officials began loosening their stay-at-home orders and businesses started reopening.
In California, most businesses are now open, but with restrictions that in many cases limit the number of customers they can serve. Most California counties now allow restaurants, retail stores, movie theaters, hotels, day camps and gyms to open.
But with new virus cases and hospitalizations rising, Gov. Gavin Newsom on Thursday ordered people to wear masks in most indoor settings and outdoors when physical distancing isn’t possible.
California has paid more than $30 billion in unemployment benefits since the start of the pandemic, according to the California Employment Development Department. The state has exhausted its account to pay these benefits, forcing it to borrow more than $2 billion from the federal government.
It’s a remarkable change for a state that, through February, was enjoying a 10-year economic expansion that saw the addition of more than 3.4 million jobs that accounted for 15% of the nation’s job growth. About two-thirds of those gains were wiped out in April as the state lost 2.3 million jobs and its unemployment rate hit double digits for the first time since the Great Recession a decade ago.
California has more than 167,000 confirmed coronavirus cases and more than 5,300 deaths, according to data complied by Johns Hopkins University.