California’s unemployment rate grows to 4.3% as job growth slows

By SETH SANDRONSKY THE CENTER SQUARE CONTRIBUTOR

(The Center Square) - California’s unemployment rate rose a percentage point to 4.3% in February from 4.2% in January, according to the state Employment Development Department. Employers added 32,300 nonfarm payroll jobs, down from 96,700 new hires in January. The labor force data for February is from two separate federal surveys, businesses and households. Employment grew in eight of California’s 11 industry sectors in February, the same fraction as January.

Education and health care employers led the way with 11,300 new hires in February, for a year-over gain of 153,000 jobs.

Leisure and hospitality employers, after hiring 20,800 new workers in January, added 11,200 jobs in February, for a year-over 151,100 new hires. Hiring picked up at eating establishments, performing arts venues, sporting events and related spectator subsectors in February, according to the state EDD. The upcoming National Basketball Association playoffs should help to propel this sector’s hiring upswing.

By RIA ROEBUCK JOSEPH THE CENTER SQUARE CONTRIBUTOR

(The Center Square) - Gov. Newsom’s proposal to “hold Big Oil accountable for price gouging” will cost about $7 million a year according to California Department of Finance testimony at a Senate Appropriations Committee hearing. Petroleum industry groups complain that the money would mostly comes from fees on them.

The SBX1-2 Energy: Transportation fuels: Supply and Pricing: Maximum Gross Gasoline refining margin bill was authored by Senator Nancy Skinner to amend several sections of the Public Resources Code, relating to energy.

The senate bill would establish a new entity within the California Energy Commission. The Division of Petroleum Market Oversight will, among other duties, “provide guidance and recommendations to the Governor and the commission on any issues related to transportation fuels pricing and transportation decarbonization in California.”

The bill would also establish the Independent Consumer Fuels Advisory Committee, consisting of specified members, within the commission, and would require the committee to advise the commission and the division.

In addition to the two new entities, Sen. Skinner also mentioned that another cost implication of the bill would come from “An ask to the state auditor’s office and a number of other things that would of course have costs some of them into the future, some of them currently but as I mentioned we’re working with the administration to try to use existing resources to bring those costs down.”

In her preliminary fiscal overview of the bill to the Appropriations Committee, Michele Perrault, legislative director at the California Department of Finance outlined anticipated costs for the bill’s execution.

For Fiscal Year 2023-2024 costs are expected to be around $7 million. Most of the cost assumptions she explained are associated “with staffing the energy commission to fulfill its obligations under the proposed statute and the developing staff outlined in the proposal.”

Ms. Perrault stated the Independent division would operate at $2.5 million ongoing, to support 10 staff members. The energy commission would require $4.4 million consisting of $2.4 million for 14 staff and $1.6 million in contract dollars.

The commission is largely supported by special funds and those are being evaluated to support some of the functions as well as the commission “is looking at the ability to redirect some of their resources and staff to meet some of the new requirements laid out in the proposal.”

“Additional costs that are noted for 23-24 could consist of contracting costs of up to $1 million for the Air Resources Board. That’s to prepare the transportation fuels transition plan that’s called out for to be done by Dec. 31 2024. And then, potentially ongoing costs of between $50k-250k annually for the California Department of Tax and Fee Administration to develop some processes to request required data that’s also laid out in the proposed statute.”

Ms. Perrault explained. “As the bill moves through the process there could be some amendments taken as it relates to the fiscal impact and so finance will continue to monitor the bill and update any financial impact as we see it move through.

Government employment dropped sharply in February. After adding 46,000 new hires in January, government payrolls added 2,400 jobs in February. The construction industry, which lost 7,300 jobs in January, added 7,600 new hires in February.

Moving forward, the Federal Reserve Bank’s policy of hiking interest rates will affect the state’s construction industry, as it relies upon borrowed money, along with other commercial activity such as the buying and selling of real estate. California’s mining and logging, and financial activities sectors showed no month-over change in employment for February, according to the EDD. The information sector shed 2,900 jobs in February, the sole industry sector experiencing such a decline, in part due to software publishers.

Against this backdrop, the Fed’s policy of rapid interest-rate increases to bring down inflation, a general rise in prices, also decreases the prices of long-term bonds. This contradictory dynamic has been a major factor in the recent financial distress of the Silicon Valley Bank, heavily invested in long-term bonds, recently.

Meanwhile, the state EDD has waived any penalty for late payroll tax from companies doing business with SVB.

In February, San Francisco County registered a 2.8% unemployment rate, a statewide low. Colusa County in rural Northern California had an unemployment rate of 18.1%, a high among California’s 58 counties.

In February, 380,768 Californians certified for Unemployment Insurance benefits during the February 2023 sample week that includes the 19th of the month, versus 368,865 in January and 425,221 in February 2022, the EDD reported.