California unemployment pops from 8.4% to 9.3% in one month. Stunning.
Last month, I compared our peak unemployment forecast (9.6%) to UCLA's (8.7%), and said we would check back in a year. Instead, let's check back now, because at this rate our forecast could be looking very low in the rear view mirror too. At least we made it a month.
The big story this month is retail. The holiday hiring surge that wasn't. Typically, retailers across the state add about 100,000 workers in November and December, and shed about 100,000 employees in January after the holidays. This holiday season, California retailers added less than 40,000 jobs, causing a big decline in "seasonally adjusted" retail employment. It will be interesting to see if the seasonal retail layoffs in January are less than expected, leading to a "seasonally adjusted" increase in retail jobs in the January report. Given the store closings and retail bankruptcies in the news, many of these retail job losses are undoubtedly permanent and we will likely see retail job losses in excess of 50,000 in the January report but probably less than the usual 100,000 decline seen after a typical holiday surge.