(The Center Square) – California lost 156,300 jobs in the first six months of 2024, according to new federal quarterly payroll data, contradicting California Gov. Gavin Newsom’s claims about job growth in the state.
Politicians nationwide often cite optimistic preliminary jobs survey data, which is often significantly revised downward once more accurate payroll information is finalized.
Adjusted California payroll data for June counted 17,881,600 jobs, while January counted 18,037,900 jobs, meaning the state lost 156,300 jobs in the first six months of 2024, the most recent time for which quarterly payroll data covering 95% of jobs is available.
The federal preliminary, sampled survey data cited by Newsom estimated 18,054,300 jobs in June, meaning the preliminary survey overestimated the number of jobs in California by 172,700.
This is unusual because jobs typically ebb and flow between weaker winter months and the busier summer season; in 2023, California gained 50,800 jobs during the same time frame.
Last week, Newsom’s office touted California’s economic growth, citing preliminary jobs figures.
“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.”
When using the final, adjusted payroll data, California jobs growth since January 2022 declines to 499,600 jobs, or 172,000 fewer jobs than Newsom announced.
Newsom did not lift the state’s mandatory stay-at-home order until Jan. 25, 2021. Many California cities, such as Los Angeles, maintained pandemic restrictions until almost halfway through 2022, meaning most of the jobs “growth” has been from the recovery of jobs lost during lockdowns.
According to Jason Sorens, an economist at the American Institute for Economic Research, the Current Employment Statistics Survey has lately been significantly overstating jobs — and that it isn’t a red or blue state issue.
“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 noted the biggest overestimates of employment as a percentage of employment were in Nevada, Missouri, South Carolina, and the District of Columbia, and that smaller states are more likely to have bigger swings.
“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.”
California’s nonpartisan, state-funded Legislative Analyst’s Office said these misses mean that it will now be using a hybrid employment measure to track the state’s jobs figures.
“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.”
