California's unemployment rate has hit a record low.
The California Employment Development Department says the state's unemployment rate was 3.9% in July. That's the lowest since 1976 when the state began using its current method of measuring job growth.
The unemployment rate in San Luis Obispo County was 2.5% in July, down just slight from 2.6% in June. In July 2021, the county's unemployment rate was 5.5%.
Santa Barbara County's unemployment rate was 2.8% in July, which is the same as it was in June. The county's unemployment rate was 5.7% in July 2021.
California employers have posted month-over-month job growth in 17 out of the last 18 months, and the state accounted for 16.1% of all new jobs last month in the U.S.
Employers added 84,800 new jobs in California in July. The biggest gains were seen in computer systems design, advertising, security services and health care.
The job gains come despite warnings from experts that the country could soon be headed toward a recession. Inflation remains high as home sales have slowed while interest rates increased.
Sales of single-family homes, a major driver of California's economy, slowed 14.4% in July compared to June and are down 31.1% from a year ago, according to the California Association of Realtors.
"It's certainly surprising," former EDD Director Michael Bernick said of California's job gains. "It goes against all the other economic indicators."
California lost more than 2.7 million jobs in just two months at the start of the pandemic in 2020, when Gov. Gavin Newsom issued the nation's first statewide stay-at-home order that forced many businesses to close.
It has taken more than two years for California to get most of those jobs back. July's job growth means the state has recovered 97.3% of those pandemic job losses.
The biggest reason for the decline in the unemployment rate is large number of new jobs added in July. But another factor is 23,400 people stopped looking for work in July, reducing the state's labor force. Some industries are continuing to see a labor shortage, mostly in restaurants and hotels, according to Sung Won Sohn, an economics professor at Loyola Marymount University.
"I think the labor force will go up in the future because people need to earn extra income to beat inflation," he said. "We are already seeing so-called gig employment rising because some people are holding two or three jobs. The fear of an oncoming recession, if we are not in one already, will cause people to look for work."
Bernick, now an attorney with the Duane Morris law firm who closely tracks California's labor market, said he suspects the state is still being propped up by billions of dollars from federal stimulus spending and the state's budget surplus. The recently passed Inflation Reduction Act in Congress will send more money to the state, lowering some prescription drug costs while helping millions pay their monthly health insurance premiums.
"That is not going to continue forever," he said.
California's budget includes $9.5 billion in refunds to about 23 million people, something Newsom touted Friday when boasting about the state's low unemployment rate.
"We have historic reserves and we're putting money back in people's pockets as we continue to lead the nation's economic recovery," Newsom said in a news release.
