Sonoma County jobless rate falls to 7.7% in August

Sonoma County’s unemployment in August fell to 7.7%, an encouraging sign for a local workforce struggling to recover from devastating economic fallout wrought by the coronavirus pandemic.

That number represents a significant improvement from the 9.8% county jobless rate in July, when unemployment dropped into single digits for the first time since the start of the pandemic in March.

Compared to the local pandemic peak jobless mark of 14.5% in April, the August rate is a reduction of almost half, according to data released Friday by the state Employment Development Department.

Still, Sonoma State University economics professor Robert Eyler, who closely monitors the area labor market, urged caution for those excited about the sharp drop in joblessness because the new figures also show the local workforce is shrinking.

The total number of residents in the county workforce ― which includes workers who are either employed or currently looking for a job ― is down 4.5% from August 2019, Eyler said. And the close to 10,000 people were not factored into last month’s jobless rate.

“That means the unemployment numbers are understating the problem,” he said.

That large group previously employed in the county may have retired, moved out of the area or simply decided to give up looking for work in a difficult job market, Eyler said. Having fewer people available to work can limit the local economy’s total output of goods and services and hamper its recovery from the pandemic-induced recession.

For those who did seek a job last month, however, the gains are clear.

In August, the local economy added 4,200 jobs, bringing the total number of employed county residents to 232,500, while 19,500 were unemployed, according to state employment data. That’s still well below a year ago, when 256,500 local residents had jobs, and the county’s unemployment level was a meager 2.7% during a robust economy.

When the pandemic first hit in mid-March, nearly 1 in 7 local workers lost their jobs in the spring as public health officials closed or imposed tight restrictions on businesses to slow the spread of the virus. As a result, residents filed almost 55,000 new claims for jobless benefits in March and April.

Initial claims for unemployment benefits have since declined, but still reflect the lackluster state of the local economy. In July, the most recent month for which claims data is available, workers filed 14,459 fresh jobless claims, compared to just 1,600 in February, the month before the pandemic emerged and public health officials essentially closed all but county businesses deemed essential.

To aid the millions nationwide still relying on unemployment benefits, President Donald Trump last month signed an executive order partially renewing expired emergency weekly federal jobless aid at $300 a week, half of what it had been from spring through July.

Officials at the state employment agency, which is tasked with distributing the money, said in an email they are currently sending out supplemental payments covering the weeks between July 26 and Aug. 15. The agency then will issue two more weekly payments, accounting for claims through the rest of August. The state also is asking the federal government for funding for an additional sixth week of unemployment aid.

As those extra jobless benefits dry up, Congress is deadlocked in discussions for another stimulus package to extend the federal payments and provide billions more assistance to whiplashed small businesses.

Rachael Hairston-Loveridge, a 38-year-old mother of two in Sonoma, has received her three payments for weeks that she was recently out of work. A freelance photographer, she has since begun picking up gigs for school portraits and small elopement ceremonies allowed under public health emergency orders.

She’s grateful for the extra cash but has read news reports about some states asking people to return these recent weekly unemployment payments that were sent out by mistake. California has not reported such issues. But she plans to hold onto the money, just in case.

“Right now, I’m just putting it in savings,” Hairston-Loveridge. “I’m just afraid to touch it.”

As the Sonoma County economy slowly rebounds, industries including construction, manufacturing and hospitality have brought back significant jobs that were slashed when the pandemic arrived this spring. Hospitality jobs in the county, nearly cut in half in April, have since increased by 44% to 18,800 in total, according to state figures.

“There’s some industries where there’s actually a really nice story here to tell,” Eyler said.

But the economist said as state and local government entities start looking at spending cutbacks to address severe budget shortfalls caused by the pandemic, public-sector workers soon could face layoffs.

As long as a coronavirus vaccine is developed and successfully distributed nationwide, Eyler expects the local economy to continue adding jobs into 2021. He sees a full economic recovery in Sonoma County by 2022 or 2023.

The economist hedged, though, offering caveats that would delay recovery here: new virus cases spiking in fall or winter causing public health officials to again impose restrictions or business closures, or the results of the upcoming presidential election upsetting stock markets and causing companies to curb hiring.

Elsewhere in the region in August, the jobless rate in Mendocino County was at 8.8%, down from 10.9% in July; Lake County also reported 8.8%, down from 11.6%; Napa County registered 8.3%, a drop from 10.4% in June; and Marin County had the third-lowest unemployment level in the state at 7.0%, a decrease from 8.8%.

California’s unemployment rate last month dropped to 11.4%, down from June’s 13.3% mark.

You can reach Staff Writer Ethan Varian at ethan.varian@pressdemocrat.com or 707-521-5412. On Twitter @ethanvarian.