Labor tight as Kern unemployment slides to 6.6%

Aug. 19—Kern's unemployment rate settled in July to a historically low 6.6 percent in another sign of labor market strength amid an economic recovery notable for its worker shortage.

State data out Friday showed the county's jobless rate declined from a seasonally unadjusted 6.8 percent in June even as the number of non-farm laborers working in the county fell almost 2 percent month over month. May's unemployment was pegged at 6.1 percent; in July 2021, it was estimated it at 10.6 percent.

Construction hiring ramped up in July, the state Employment Development Department reported, along with professional and business services and the category of transportation, warehousing and utilities. But job losses hit health care and social assistance, and employment in food manufacturing is down significantly year over year.

The 4 percentage-point improvement in the county's unemployment rate during the past year "demonstrates what we're hearing anecdotally from our members — that the labor market continues to be tight and the competition for skilled workers continues to be fierce," President and CEO Nick Ortiz of the Greater Bakersfield Chamber of Commerce said by email.

Also Friday, in the latest expression of confidence in the local economy and a sign of renewed work in construction, John Balfanz Homes announced it had begun work on its Amberley neighborhood of southwest Bakersfield, expected to add 144 homes in phases to Belcourt Seven Oaks at White Lane and Buena Vista Road.

At a time of housing shortage, and as rising interest rates shrink the number of qualified homebuyers, the Bakersfield-based homebuilder said it expects to finish a series of model homes by the end of this year, with four different architectural styles and floor plans ranging from 1,698 to 2,616 square feet.

"With this continued development, we are pleased that John Balfanz Homes can provide the needed inventory to meet the increased demand for new homes as the master-planned community continues to grow west," CEO Greg Balfanz said in a news release.

State data shows the county's unemployment rate has remained in single digits for a full year, after having been 10 percent or higher since March 2020. Prior to the coronavirus crisis it had kept in the single digits for two years.

President and CEO Richard Chapman of the Kern Economic Development Corp. pointed out that the county's average July unemployment rate, since at least 1990, is 11.1 percent, and that last month's 6.6 percent is the lowest for that month in at least 32 years.

Cal State Bakersfield economist Richard Gearhart noted Kern's unemployment rate hovers historically between 6 percent and 10 percent, depending on the time of year. He pointed out that 6,900 fewer people participate in Kern's workforce as compared with before the pandemic, and 700 more people employed in the local market.

"If you kept our labor force the same as it was in July 2019 with current employment numbers, our unemployment rate would be 8.2 percent," Gearhart said by email. He added that the situation reflects a national quirk in which the labor market is performing "weirdly well" after people dropped out of the workforce for various reasons.

Kern's 5,000 month-over-month drop in nonfarm employment may be worrisome, he wrote, though he noted it has happened before, usually causing unemployment to rise.

Gearhart also observed that most of July's losses appear to be seasonal, and that it bears watching whether employers in health care, education and other fields are having real problems attracting workers.

According to seasonally unadjusted figures from the EDD, construction employment in Kern was up 600 positions from June, or 3.9 percent. The total was 1.3 percent greater year over year.

The job category of professional and business services expanded in July by 400 jobs, or 1.6 percent, and was up 2.4 percent from July 2021, the EDD said.

Transportation, warehousing and utilities were up 200 positions in July, or 0.9 percent, and up more than 15 percent year over year.

Retail was down 200 jobs in the county since June, a drop less a little more than half of 1 percent that left the category up 1.2 percent since July 2021.

Employment in health care and social assistance was off 1,100 jobs, or 2.6 percent, since July but up 2.3 percent year over year.

Local education hiring, generally seasonal, was down 5,000 jobs but up 1.3 percent year over year.

Manufacturing employment was steady in July in Kern but shed 400 positions, or 8.7 percent, during the previous 12 months.

Ortiz at the chamber suggested the construction gains may signal Kern has avoided the housing recession seen elsewhere. He blamed the food manufacturing slowdown on the drought.

The unadjusted national unemployment rate in July came to 3.8 percent in July, same as June and well below July 2021's 5.7 percent.

The EDD estimated California's unadjusted jobless rate at a 46-year low of 3.9 percent, as compared with 4 percent in June and 7.8 percent in July 2021.

The office of Gov. Gavin Newsom, noting the state's unemployment rate in February 2020 was 4.1 percent, called the state's performance evidence that people are getting back to work after the pandemic.