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California’s job market: More firings – less hirings and quits

October 16, 2023

“Numerology” tries to find reality within various measurements of economic and real estate trends.

Buzz: California’s employment picture has cooled to either (1) a new normal or (2) a worrisome slowdown.

Source: My trusty spreadsheet crafted the “HQF” index to loosely measure statewide tensions in the workplace. The math, taken from some novel federal job statistics, compares California hiring (an upbeat signal) with statewide quits and firings (usual signals of distress).

Fuzzy math: What’s up with workplace revolts across California this year – from tussles over work-from-home policies to numerous disagreements putting workers on picket lines?

Topline

California had an HQF rating of 112 in the year’s first seven months – that’s 112 hires for every 100 quits and firings.

What does that mean? Well, it’s sort of a “it-could-be-worse” message. Why? Consider the index’s history.

Since 2001, California has averaged 113 hires for every 100 quits and firings through July. So this year’s is a tad slow.

Now it’s not the worst. That HQF honor goes to mid-Great Recession 2009 which scored a 101. Nor was it the best such as 2021’s rebound from pandemic lockdowns, which scored 124.

MORTGAGE NEWS: What’s up with rates? Who’s lending? CLICK HERE!

Taking the shorter-term view, 2023’s HQF is an upgrade from last year’s 108. And it tops the 109 average of pre-pandemic 2018-19.

To the HQF, at least, the California job market isn’t so bad.

Details

Let’s see what’s moving the HQF in 2023.

1. Hiring pace cools. Staff additions show confidence in the business climate. And this kind of optimism is down. California bosses hired 4.1 million in 2023, but that’s off 10% in a year. However, it’s 2% above the 2018-19 pace.

EXODUS SLOWDOWN?: California exits drop 3%, arrivals rose 10%. READ HERE!

2. Quits slow. The “bye, boss” trend is cooling but remains a concern. The 2.4 million Californians who voluntarily left a job this year is off 22% in a year. But quits remain 2% above the 2018-19 norm.

3. Firings are up. Telling workers they’re no longer needed is the most public signal of worry. And the 1.1 million Californians who were involuntarily let go is up 5% in a year. And it’s 15% above pre-pandemic 2018-19.

Bottom line

Rising workplace tensions could be more than just awkward adjustments between boss and employee as the economy adjusts to post-pandemic normalcy.

Fewer job opportunities – less hiring and more firing – can make folks think twice about quitting. But it hasn’t stopped folks from walking off the job en masse.

More traditional job-market yardsticks also show a changing boss-worker dynamic.

Yes, a record number of Californians are employed. But the growth of staffing suggests bosses are a wee bit antsy.

The 2.4% increase in total workers statewide this year is historically strong. But it’s off from 2022’s torrid 6.9% job creation. Curiously, this year’s increase tops the 1.8% job growth of 2018-19 – supposedly the good ol’ days.

Peeking at unemployment, the average 900,000 California officially out of work per month this year is up 7% in a year and 9% above 2018-19. Job security seems to be slipping.

In some ways, though, this year’s workplace chill should be little surprise. It’s exactly what the Federal Reserve is seeking in its quest to fix an overheated US economy.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected]

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