Sonoma County jobless rate falls below double digits to 9.8% in July, but concerns linger

Sonoma County’s unemployment in July dropped into single digits again at 9.8% of the workforce, gradually recovering after three months of excessive job losses caused by the economic fallout of the coronavirus pandemic.

The rate represents sharp improvement from the 14.5% apex of joblessness in April, according to data released Friday by the state Employment Development Department.

Nevertheless, area labor market analysts are concerned the lingering pandemic could cause a number of permanent business closures that would inflict more pain on the local economy. That leaves uncertainty if the three-month downward unemployment trend will continue into the fall.

“If we start losing businesses in mass, which is possible, that’s when we are going to start having big problems,” said Sonoma State University economics professor Robert Eyler, who closely tracks the area labor market.

There were 24,700 county residents without jobs last month, 4,700 fewer than in June when 29,400 people were out of work. That’s still far worse than a year ago, when only 7,700 were unemployed, and the July 2019 jobless level was at 2.9% during a prosperous economy.

“The year-to-year still shows a relatively large hole to climb out of,” Eyler said.

When the pandemic arrived in March, prosperity gave way to peril.

Nearly 1 in 7 county residents lost their jobs in that first month of coronavirus transmission, when 35,100 jobs evaporated as public health officials imposed tight restrictions on business activity to slow the spread of the virus. Since then, about a third of those jobs, or 10,400, have returned, according to state employment department figures.

Rachael Hairston-Loveridge, a 38-year-old mother of two in Sonoma, is a freelance event photographer who lost nearly all of her work when the pandemic emerged. Over the past month, however, she has begun picking up gigs for school portraits and small elopement ceremonies allowed under public health emergency orders.

She’s still recovering financially after nearly five months relying almost entirely on unemployment benefits. But she’s optimistic the worst is behind her.

“It’s gone from this hopeless feeling of I’m never going to make it out of this, to there’s so much future ahead,” Hairston-Loveridge said.

The broad tourism and hospitality sector has taken the brunt of economic damage related to COVID-19 because restaurants, wine tasting rooms and breweries were limited for a few months in spring to takeout and online sales. And although most hotels remained opened, there were few guests. The area relies heavily on tourism as a major economic driver and employer.

The local July jobless numbers likely are better than the actual picture because the countywide tally was conducted by state employment officials the week ended July 12. The next day, Gov. Gavin Newsom imposed a rollback on business openings — particularly closing bars and indoor eating and drinking service at restaurants, wineries and breweries — in a large portion of the state including Sonoma County as a result of a COVID-19 resurgence.

“Though many (business) sectors are still held back by state health orders in the interest of preventing the spread of COVID-19, other sectors are tailoring their operational needs and scaling back to previous levels, which is encouraging,” said Sheba Person-Whitley, executive director of the Sonoma County Economic Development Board.

One example was closing to traffic a key section of Fourth Street in downtown Santa Rosa to enable restaurants and brewpubs to expand outdoor dining onto the street.

With the pandemic raging in its sixth month, a major concern for businesses locally and nationwide remains the inability of Congress to agree on another big package of financial relief for consumers and small companies. The federal $600 weekly jobless bonus benefit expired July 31, and the U.S. Small Business Administration’s Paycheck Protection Program that provided billions of dollars in forgivable loans to businesses with 500 or fewer employees dried up.

Another key indicator for the area labor market is the overall civilian employment number. In July in Sonoma County, it stood at 228,300 residents with jobs. That was an increase of 5,400 jobs from June, but still about 10% less than July 2019. The future local economic picture depends on those jobs eventually coming back, Eyler said.

Besides the continued disruption to tourism and the hospitality industry overall, the potential for area layoffs among county and state government entities is a concern as budgets need to be sharply cut.

Also, the county employment data released Friday showed a 23.7% annual decrease in education jobs to 8,700 positions. That’s 2,700 fewer people working in education than in July 2019.

“That’s unfortunately a relatively large drag. That’s something to watch,” Eyler said.

Elsewhere in the region in July, the jobless rate in Mendocino County was at 10.9%, down from 12.3% in June; Lake County reported 11.6%, down from 14.2%; Napa County registered 10.4%, a drop from 12.6% in June; and Marin County had the third-lowest unemployment level in the state at 8.8%, a decrease from 10.1%.

California’s unemployment rate last month remained a lofty 13.3%, but down from June’s 14.9% mark.

Press Democrat reporter Ethan Varian contributed to this story.