My trusty spreadsheet, filled with state job figures released Friday, May 19, found 8.02 million at work in Los Angeles, Orange, Riverside and San Bernardino counties in April. The job count, not adjusted for seasonal variations, was up 52,100 in a month and up 160,100 in 12 months.

Local hiring averaged 22,620 in April between 2015-19. In March, 14,400 employees were added in the region.

The hiring rebound cut Southern California joblessness. Southern California’s unemployment rate was 4.1% for April compared with 4.6% in the previous month and 4.2% a year earlier. Joblessness averaged 4.2% in pre-pandemic 2018-19.

Industry swings

Look at job changes in 10 key Southern California business sectors, ranked by one-month change …

Leisure/hospitality: 1.06 million – up 11,000 in a month and up 39,700 in a year.

Education/health: 1.46 million – up 10,100 in a month and up 68,200 in a year.

Construction: 409,400 workers – up 8,200 in a month but down 900 in a year.

Professional-business services: 1.02 million – up 6,000 in a month and up 12,100 in a year.

Transport-warehouse-utility: 698,100 workers – up 4,100 in a month and up 13,500 in a year.

Information: 265,100 workers – up 2,200 in a month but down 900 in a year.

Financial: 410,300 workers – up 2,100 in a month and up 3,700 in a year.

Government: 1 million workers – up 1,800 in a month and up 18,700 in a year.

Retailing: 634,400 workers – up 1,600 in a month and up 9,400 in a year.

Manufacturing: 442,300 workers – up 300 in a month but down 2,000 in a year.

Regional differences

Here’s how the job market performed in the region’s key metropolitan areas …

Los Angeles County: 4.64 million workers, after adding 29,800 in a month and growing by 106,200 in a year. Hiring averaged 8,880 for the month between 2015-19. Unemployment? 4.5% vs. 5% a month earlier; 4.5% a year ago; and 4.6% average in 2018-19.

Orange County: 1.71 million workers, after adding 15,200 in a month and growing by 41,800 in a year. Hiring averaged 6,860 for the month in 2015-19. Unemployment? 3% vs. 3.4% a month earlier; 2.7% a year ago; and 2.9% average in 2018-19.

Inland Empire: 1.67 million workers, after adding 7,100 in a month and growing by 12,100 in a year. Hiring averaged 6,880 for the month in 2015-19. Unemployment? 4.1% vs. 4.6% a month earlier; 3.4% a year ago; and 4.2% average in 2018-19.

By the way, similar stats show the rest of California with 10 million workers in April – up 65,900 in a month and up 231,600 in a year.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

At least 3,000 workers voted May 12 to launch a five-day strike beginning May 22 at Los Robles Medical Center in Thousand Oaks, West Hills Hospital, Riverside Community Hospital and two hospitals in San Jose.

The employees represented by SEIU-UHW include emergency room technicians, nursing assistants, respiratory therapists, lab techs, dieticians, pharmacy techs and cooks.

The contract settlement includes 15% raises over three years and preserves healthcare and education benefits for workers.

A vote to ratify the contract is slated for late May.

California bosses laid off 236,000 workers in March, a 60% jump from the average pace of job cuts in the previous 12 months.

The jump in workers’ involuntary departures to the fastest pace since December 2020 was found in my trusty spreadsheet’s review of the federal government’s monthly Job Openings and Labor Turnover Survey. The report, dubbed “JOLTS” by economists, tracks what’s moving the job market.

March’s layoffs are nowhere near the historic 1.5 million cuts of March 2020 amid coronavirus lockdowns. However, it’s a noteworthy spike that follows months of high-profile job cuts, notably in California’s technology industries and several eye-catching bank failures.

The bump in worker discharges is also a warning signal that the Federal Reserve’s year-long attempt attempts to cool an overheated economy with soaring interest rates are making bosses antsy.

California’s March layoffs are 25% larger than the monthly average in pre-pandemic 2015-19, what’s considered a healthy economic period. And they’re 7% bigger than the 2002-2006 housing-fueled boom. Those March cuts also are 12% above the typical month since 2001.

Or look at the March firings this way: Layoffs equaled 1.3% of all workers, up sharply from the 0.8% average of the previous 12 months.

Plus, it’s not a one-month uptick. Bosses laid off 1.84 million in the past 12 months – up 13% from 1.63 million in the previous 12 months.

Let me note the recent layoff spree is historically modest: Since 2001, the typical 12-month period has averaged 2.55 million forced departures.

Other slow signs

Growing boss unease also can be found in the number of job openings – 911,000, the lowest since March 2021 and down 24% vs. the average of the previous 12 months.

Still, California bosses seem to be hurting for workers. Historically speaking, openings are up 33% vs. 2015-19, and they’re up 108% vs. 2002-2006.

The need for employees equals 4.8% of all workers in March. That’s down from the 6.3% average in the previous 12 months, but it’s still well above the 3.9% pace of 2015-19, and 2.9% in 2002-2006.

But when you look at California’s openings as a measure of worker availability, the job market is tightening.

There were 90 unemployed workers for every 100 openings in March vs. 68 on average in the previous 12 months. But talent is still hard to find: there were 143 jobless for every 100 openings in 2015-19 and 250 in 2002-2006.

Do not forget bosses are still hiring, though at a slower speed.

The 606,000 new workers added in March was down 1% vs. the previous 12 months. New staff equaled 3.4% of all jobs in March vs. 3.5% average in the previous 12 months.

Nevertheless, this is a cooling of staff additions. The 7.36 million hired in the past year is down 6% from the previous 12 months.

In addition, think about total employment statewide – 18 million workers in March, up 11,900 from February vs. job growth averaging 40,000 the previous 12 months.

Quits chill

Workers also are sensing the chill, leading to a dwindling voluntary departure count.

California had 363,000 quits in March, the fewest since March 2021 and down 11% vs. the previous 12-month average. Or look at the pullback this way: The 4.83 million quits of the past year are down 6% from 5.13 million in the previous 12 months.

Yet this might be job quits returning to a more normal pace for an otherwise solid economy.

Yes, quitters were 2% of workers in March, the smallest share since January 2021, and down from the 2.3% average of the previous 12 months.

But California’s “so long, boss” crowd is only a shade above the 1.9% average of both the 2015-19 and 2002-2006 job-growth periods.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Southwest Airlines pilots voted nearly unanimously to authorize a strike, a sign of frustration over what they view as a lack of progress in contract negotiations.

Leaders of the Southwest Airlines Pilots Association called an early end to voting after 98% of pilots at the Dallas-based carrier cast ballots, with 99% of those voting in favor. The airline has more than 10,000 aviators.

SEE MORE: United Airlines pilots picket Friday over ‘antiquated’ scheduling system

While the vote doesn’t mean pilots will strike immediately, it gives union leaders approval to call for a walkout if one is authorized by the National Mediation Board. That can only occur after a multi-phase process outlined in the Railway Labor Act, which governs airline labor relations.

“This is a historic day, not only for our pilots but for Southwest Airlines,” Casey Murray, union president, said in a statement. “The lack of leadership and the unwillingness to address the failures of our organization have led us to this point.”

The airline said in a separate statement that negotiations are continuing and it is not deterred by the union’s vote. The latest development will have no impact on Southwest’s scheduled operations.

“Our negotiating team continues to bargain in good faith and work toward reaching a new agreement to reward our pilots,” Adam Carlisle, the company’s vice president of labor relations, said in the statement.

As home and work have converged for many, it can be challenging to discern how to separate the two. How do you avoid having home feel like “the office” while still creating an environment that feels like home? Where is the work-life balance?

Here are some recommendations for designing an ideal blend of work and relaxation under the same roof.

1. Create a separate area for work. Ideally, this should be a separate room. If you can’t, creating a work “zone” that is separate and distinct from other activities will help.

2. Take frequent breaks during the day. Once in the morning, once around lunch and once before the end of the day is ideal.

3. Spend some time outdoors. Taking time for a breath of fresh air will help instill a sense of calm.

4. Infuse soothing colors to inspire serenity. Pure white, neutrals and soothing blues are a good place to start.

5. Incorporate greenery and other natural elements. Trees and plants can go a long way in helping a space feel modern and fresh.

6. Use as much natural sunlight as possible, or infuse as much light as possible into a space. Sunlight can help increase serotonin in the brain.

7. Consider incorporating scent or fragrance. A calming effect can come from soothing the senses through aromatherapy.

8. Experiment with mirrors. Mirrors reflect light and can act like windows in a space.

9. Use wood and woodlike elements. This can help ground a space and make it feel cozy.

(Cathy Hobbs, based in New York City, is an Emmy Award-winning television host and a nationally known interior design home staging expert and short-term rental/vacation home designer with offices in New York City and The Hudson Valley. Contact her at info@cathyhobbs.com or visit her website at cathyhobbs.com.)

©2023 Tribune Content Agency, LLC.

The tasks were simple, but it’s work.

The laborers are all adults who have intellectual or developmental disabilities, performing jobs under contract for local businesses and nonprofits. VistAbility, the nonprofit employment services provider that runs the shop, pays them each $3 to $14 an hour, depending on their speed.

The arrangement is legal — for now.

Thanks to a 2021 law change, California will soon ban paying subminimum wages to people with disabilities, a decades-old practice originating from the Great Depression.

By 2025 “sheltered” disability programs like the one at VistAbility — which together employ about 5,000 Californians statewide — must begin paying the state’s $15.50-an-hour minimum wage or shut down.

The transition toward better pay has exposed a bitter debate within the state’s disability services community: Can everyone with a disability get a job in the broader labor market — and should that be the goal? And for a group of people largely receiving public assistance, what’s the role of a job in their lives?

John Bolle, VistAbility’s executive director, said when his workshop is required to pay minimum wage, some of the faster workers may be able keep working. But he doubts local businesses and nonprofits will pay more expensive contracts to accommodate higher wages, and he predicted those with the most significant disabilities likely will lose their jobs.

“The state is essentially ignoring those people,” he said.

Better jobs ‘within my reach’

At VistAbility some workers said they liked the company of coworkers, the steady tasks and guaranteed weekday hours. They said it would be harder to find an “outside job.” John Shillick, 61, said he used to clean motel rooms with the help of a job coach, but he found it difficult to keep pace.

“I would like to get a better job with a decent salary,” Shillick said. “I don’t know exactly what, but something within my reach.”

Opponents of subminimum wage programs like Vistability’s say they segregate people who have disabilities, keeping them from obtaining better paying work and greater independence — which they could achieve with the right services to assist them.

On the other side, program operators and some workers’ families defend the current arrangements, saying these workers would not otherwise have job opportunities. About 20% of people who have developmental disabilities in California are employed, the state’s Department of Developmental Services says.

Chris Bowers’ 42-year-old son, Cory, was one. He worked for nearly 20 years for less than minimum wage at an Orange County retail store, where an employment services provider placed him. Recently that provider shut down its subminimum wage programs, ending his job.

Now Bowers can’t imagine his son, who has Down syndrome, finding a job like that one, which provided transportation and a job coach.

“There’s no avenue for our kids to go to a job site, other than somebody’s going to have to pay them $16 an hour,” Bowers said. “He can’t do the job of somebody that’s earning $16 an hour. It’s just not going to happen.”

State resources for workers with disabilities

The new law requires that all subminimum wage workshops phase out. Whether their participants end up in better jobs, or with little to occupy their days, in large part depends on how California’s disability services system responds.

The Department of Developmental Services, which pays for these services, says it is ramping up funding so providers of job placement services can get those currently working for less than minimum wage into “competitive integrated employment” — that is, working for at least minimum wage alongside coworkers who don’t have disabilities.

But if the past is prologue, the Legislative Analyst Office notes such resources are under-utilized.

The office analyzed state-funded competitive integrated employment programs for workers with disabilities — including paid internships — and found that service providers used only 60% of the funds allocated in the 2021-2022 fiscal year. And that was the most spent in each of the last five years. 

The developmental services department gave out $10 million in grants from last year’s budget to boost employment services and is developing another program this year to pay for placing workers with disabilities into competitive employment.

“We have to set a new direction for our entire system, where employment is the expectation for everyone,” said Brian Winfield, its director of programs.

But many worry that when workshops go away, there won’t be enough job placement services to go around. The disability services system is underfunded and understaffed, said Barry Jardini, director of the California Disability Services Association.

“A lot of the challenge is around whether or not we have the policies in place in California today to make it possible on a broad scale to provide the intensive (worker) supports and job discovery, job exploration,” Jardini said. “Right now all of this policy change is being overlaid on a very stressed system.”

The first workshops

There also is a lack of data. The state tracks the kinds of employment services these workers get, but not the kinds of jobs, so it’s unclear where people exiting workshops are landing.

Paying people with disabilities less than the minimum wage is legal because of a New Deal-era section of federal labor law called “14c,” designed to help wounded World War I veterans get limited access to jobs.

Employers registered with the federal government to hire these workers at a fraction of the pay of other workers. The employers assessed their productivity every six months, comparing them to non-disabled workers making market wages.

Now the vast majority of 14c employers in California are vocational rehabilitation providers — job training services for people who have intellectual or developmental disabilities, including autism, Down syndrome and cerebral palsy. 

Californians with disabilities have a constitutional right to services that allow them to live as independently as possible. If they seek employment help, state regional disabilities centers can refer them to 14c programs or to other employment options.

Employers in 14c programs can pay workers less than not only the California minimum wage, but also the federal $7.25-an-hour minimum wage, in two types of settings: in congregate, factory-like worksites sometimes called “sheltered workshops,” or in small work groups that are assisted by a job coach. In the groups, three or four workers split a single minimum wage position, typically mopping floors or stocking shelves at a local business.

Subminimum wage positions are most suitable for those with the most significant disabilities, program operators said.

A national shift

As part of the national shift toward integrating people with disabilities into communities, the U.S. Commission on Civil Rights in 2020 called for subminimum wage programs to end, saying the programs trap people in “exploitative and discriminatory” situations.

Michael Pugliese, who has autism, worked in a video rental store after high school but lost that job when the industry crashed.

When he was 21, a state regional center referred him to a sheltered workshop in the Sacramento area for employment training. At the workshop Pugliese assembled electronics alongside other workers with disabilities, cordoned off from other workers.

The job paid him about $225 a month, included little useful training for other work and made him feel like “a cog in a machine,” said Pugliese, now 37.

“I didn’t know at that point in time that was nickels and dimes,” he said of his pay, compared to coworkers’.

A dozen states besides California have passed laws banning below-minimum-wage programs. Also a federal rule in effect this year requires disability services to be more integrated with the community.

These kinds of jobs have already declined in California. In 2009, as many as 16,000 people with disabilities worked in the workshops or the small groups that split a minimum wage. By 2021, employment in those programs had fallen to about 6,000, state officials said.

Now that the phaseout deadline approaches, it’s up to the state and a network of disability service providers to help transition workshop employees into other jobs, if they want them.

Fitting each worker’s need

The gold standard, according to the independent State Council on Developmental Disabilities, would be a job placement and coaching service that’s highly tailored to fit each worker’s needs and abilities.

Carole Watilo directs the Sacramento-area Progressive Employment Concepts, which provides job coaching and placement.

She said a client who uses a wheelchair and communicates using a tablet device handles code enforcement for a small police department in Sacramento County, including spotting such violations as people parking illegally in disabled spaces. A support worker drives him.

Progressive initially placed him there as a volunteer, she said, then it received grants to cover his work. She hopes to find him ongoing paid employment.

“When you start from the premise that there are going to be people that you can’t find a job for, then that is going to be a self-fulfilling prophecy,” Watilo said.

Pugliese also sought job services at Progressive after leaving the workshop. When he told them of his affinity for pets, a job coach found him a state-funded internship grooming dogs. They tried him at several pet groomers until they found a good fit.

He’s on health leave now but normally earns $16 an hour.

“I’ve had more general impact on the actual shop than ever before,” he said. “My actual work effort was reflected in the shop’s progress. I mattered as a person and as an employee.”

What’s realistic?

Chris Bowers, Cory’s father, said he doubts his son will work the same jobs as everybody else. That’s just the reality of the job market, he said.

In high school Cory Bowers went to classes with a group of other students with disabilities. After they graduated, Goodwill of Orange County placed him, with two or three others, at a clothing company’s warehouse and later at a local retailer. They hung clothes on racks, splitting one minimum-wage job.

Corey took home $2.50 an hour, his father said. He loved his job and came home feeling accomplished and eager to spend his paycheck, taking his parents out to dinner, Chris Bowers said.

Goodwill of Orange County closed its subminimum wage program during the pandemic and never reopened it. 

Before the pandemic, the nonprofit had placed as many as 700 workers in its stores or in local businesses, paying them less than minimum wage. Rick Adams, its vice president of mission services, said the “vast majority” of businesses were not interested in taking the workers back at higher wages.

Now about 100 people with disabilities work for Goodwill stores and 50 have jobs in the community, he said.

Instead of working, Cory now participates in a day services program that drives him and others to visit the library, coffee shops and stores. Chris Bowers described it as “glorified babysitting” and says his son is “different mentally.”

To Chris Bowers it was never about the money; his son lives with him and receives Social Security benefits.

“As parents, especially in my circle, we sure didn’t care what our kids made,” he said. “We just wanted our kids to be out in a job site, learning.”

“The job growth in California already has slowed considerably in 2023 from the previous two years, and it will continue to slow throughout 2023,” said Michael Bernick, a former California Employment Development Department director and now an employment attorney at Duane Morris LLP.

Later this week, Gov. Gavin Newsom plans to introduce a revised budget for fiscal 2024, which begins July 1. A gloomier employment outlook could have an impact on deficits and spending.

“Our view going into this budget process is to be mindful that we have made a stronger recovery out of the COVID recession, but there are real risks out here,” said H.D. Palmer, spokesperson for the Department of Finance.

Unemployment is one of the bigger risks.

“The state’s economy is heavily dependent on real estate, technology, agriculture and international trade. Unfortunately, all these sectors are suffering downturns,” said Sung Won Sohn, president of SS Economics, a Los Angeles-based consulting firm.

The path of both the state and national economy has been unusually unpredictable. The Federal Reserve’s series of increases in key interest rates over the last 14 months was designed to cool the economy and cut the rate of inflation.

While prices have stopped rising at last summer’s sizzling pace, the economy continues to perform fairly well. The national unemployment rate last month hit 3.4%, its lowest level in 54 years.

California’s latest reported rate was 4.4% in March, the same rate as in February. In March 2022 the rate was also 4.4%, but dropped slightly below 4% over the summer before climbing slowly again.

Bernick’s data show California averaged gains last year of over 51,000 jobs per month. While some unusual factors pushed January’s job growth to 96,700, it collapsed in February to about 21,800 and then 8,700 in March.

Bernick predicted a gain of about 25,000 jobs in April, but said “the slowing growth will continue, as the high interest rates, high inflation, business caution and declining consumer savings take effect.”

California employment has struggled to regain its pre-pandemic levels in the leisure and hospitality industry, which provides about 2 million jobs. March employment was slightly below levels in February 2020, the month before the pandemic hit the sector hard.

The sluggish growth has been concentrated largely in the Bay area and Los Angeles, said the UCLA Anderson School economic forecast in March.

It attributed the problem in part to the increase in remote work, which has kept demand for restaurants and bars down. Fewer foreign tourists are visiting, particularly from China.

The bigger risk to the state’s employment picture involves the broader economy.

The state’s independent Legislative Analyst’s Office cited a “presently heightened risk of recession” in its January report on the budget.

That warning came a week after Newsom proposed a $297 billion spending plan for fiscal 2024 that included a $22.5 billion deficit. With the economy and employment slowing, that deficit projection is expected to grow when Newsom releases his revised budget Friday.

Fewer California jobs?

Since the economy depends heavily on technology, trade and agriculture, as the economy slows analysts predict an impact on jobs.

“Technology was the backbone of the state’s economy, but layoffs are mounting and demand for their products softening,” said Sohn.

Drought and floods have affected agriculture and related industries, he said, and while California is a gateway for trade with Asian countries, “both political and economic problems (related to Covid) with China have slowed the Asian trade.”

But Somjita Mitra, California’s chief economist, said that a higher unemployment rate is “not necessarily a bad thing.”

She said it could indicate people returning to the labor force and looking for work. The state also has a more fluid economy in which workers switch jobs more frequently.

After an unprecedented pace of job recovery coming out of the pandemic, California’s unemployment has returned to a more “predictable level,” said Mitra.

While tech companies such as Meta, Lyft and Salesforce have laid off tens of thousands of employees in recent months, a relatively small number of the total cuts have targeted Californians, Mitra said. Those who do live here are expected to bounce back relatively quickly

“The workers themselves tend to be highly skilled, highly qualified and highly compensated, so as a result, they tend to be highly desirable workers,” Mitra said.

She added that “We’re monitoring very closely and if we start seeing some long-term unemployment, then we will start worrying about the health of the tech industry itself.”

Mitra cited other uncertainties, notably the fate of the federal debt limit and the rate of inflation. President Joe Biden and congressional leaders are deadlocked over how to raise the debt limit. The U.S. Treasury estimates that around June 1, it could lack the funds to pay all the government’s bills.

Remote jobs are still plentiful, but these days you have to know where to look.

The most remote-friendly city isn’t San Francisco or San Jose, but Bloomfield, Connecticut, headquarters of insurer Cigna Group, where nearly half of job vacancies offer some freedom to work from home. It’s followed by Augusta, the capital of Maine, and Dover, Delaware, according to a team of researchers who analyzed the share of job vacancies that specifically allow working from home at least one day a week. The top ten isn’t limited to cities in the Northeast; also making the cut are Lansing, Michigan, and Helena, Montana.

Those seeking remote jobs should steer clear of Burleson, Texas, along with Olive Branch, Mississippi, and Mount Juliet, Tennessee.

With many companies slowing hiring, conducting layoffs and getting stricter about return-to-office policies, there’s concern that remote jobs are getting more scarce.

The data, from academics including Stanford University economist Nicholas Bloom, shows the share of job listings that offer at least some remote work declined across many US cities in March, the most recent month analyzed. In Phoenix, for example, remote jobs were 15% of all vacancies in March, down from about 18% over the past four months, while in San Diego, the share declined to 13.5% from 15.4%.

Remote work might soon get less popular in Bloomfield as well. Cigna CEO David Cordani said the company will shift beginning in September to “more colleagues working a majority of time in one of our sites,” according to a March employee memo, which stated that 90% of Cigna’s 70,000-person workforce have been working remotely all or nearly all of the time. Cigna has several thousand employees in Connecticut, according to a spokeswoman.

“Ultimately, our goal is a workforce model where those working in a site are generally more in line with pre-pandemic levels,” Cordani said in the memo. “Innovation and brainstorming are most effective in person.”

Those sentiments could set up a clash with employees who prefer more flexibility. A recent survey of more than 2,000 college seniors from ZipRecruiter found that 44% want a hybrid work arrangement, 33% preferred to be fully remote, and just 23% wanted to work on-site every day.

Peter J. Lambert, a doctoral student at the London School of Economics who helped gather the data, cautioned against reading too much into short-term fluctuations in job postings, but separate research from Bloom and other sources point to hybrid-work plans — rather than fully remote or full-time in an office — emerging as the preferred model for large white-collar organizations.

Among hybrid plans, two or three days in the office are the standard approach, although a few big employers, like Walt Disney Co., have told corporate staff to come back four days a week.

WASHINGTON — America’s employers added a healthy 253,000 jobs in April, evidence of a labor market that still shows surprising resilience despite rising interest rates, chronically high inflation and a banking crisis that could weaken the economy.

The unemployment rate dipped to 3.4%, matching a 54-year low, the Labor Department said Friday. The jobless rate fell in part, though, because 43,000 people left the labor force, the first drop since November, and were no longer counted as unemployed.

In its report Friday, the government noted that while hiring was solid in April, it was much weaker in February and March than it had previously estimated. Job gains for those months was downgraded by a combined 149,000. And hourly wages rose last month at the fastest pace since July, which may alarm the inflation fighters at the Federal Reserve.

April’s hiring gain compares with 165,000 in March and 248,000 in February and is still at a level considered vigorous by historical standards. The job market has remained durable despite the Fed’s aggressive campaign of interest rate hikes over the past year to fight inflation. Layoffs are still relatively low, job openings comparatively high.

Job growth was particularly strong last month among health care companies, restaurants and bars and a broad category that includes managers, administrators and technical support workers.

In one sign of the benefits of a consistently tight job market, Black unemployment dipped in April to 4.7% — the lowest such level in government records dating to 1972.

Looked at broadly, the nation’s job market appears to be easing into a more moderate phase, roughly akin to the pace of hiring that preceded the pandemic recession of 2020. Job gains for February through April marked the weakest three-month average since January 2021 yet still slightly exceeded the pre-pandemic pace.

Fed Chair Jerome Powell himself sounded somewhat mystified this week by the job market’s durability. He and other Fed officials have expressed concern that a robust job market exerts upward pressure on wages and prices. They hope to achieve a so-called soft landing — cooling the economy and the labor market just enough to tame inflation yet not so much as to trigger a recession. Most economists doubt that the Fed will succeed and expect a recession to begin sometime this year.

Last month, the proportion of Americans who either have a job or are looking for one — the so-called labor force participation rate — was unchanged at 62.6%. The Fed would like to see labor participation grow: More people in the job market would likely put downward pressure on pay growth and help contain inflation.

Average hourly wages rose by 0.5% from March to April, nearly twice what economists had expected.

“Wage pressures on inflation are proving persistent,’ Brian Coulton, chief economist at Fitch Ratings, wrote in a research note. “And with the participation rate failing to improve, this jobs report will not convince the Fed that they are on top of inflation.”

The ever-higher borrowing costs the Fed has engineered have weakened some key sectors of the economy, notably the housing market. Pounded by higher mortgage rates, sales of existing homes were down a sharp 22% in March from a year earlier. Investment in housing has cratered over the past year.

America’s factories are slumping, too. An index produced by the Institute for Supply Management, an organization of purchasing managers, has signaled a contraction in manufacturing for six straight months.

Even consumers, who drive about 70% of economic activity and who have been spending healthily since the pandemic recession ended three years ago, are showing signs of exhaustion: Retail sales fell in February and March after having begun the year with a bang.

As the Fed has raised rates — 10 consecutive hikes since March 2022 — inflation has slowed from a year-over-year peak of 9.1% last June to 5% in March. That’s still well above the Fed’s 2% target. But it may signify enough progress, along with signs that the job market is decelerating, to persuade the central bank to pause its rate hikes.

“Everything’s moving in the right direction,’ said Tom Garretson, senior portfolio strategist at RBC Wealth Management. “The Fed’s probably done enough.’

The Fed’s rate hikes are hardly the economy’s only headwind. Congressional Republicans are threatening to let the federal government default on its debt, by refusing to raise the limit on what it can borrow, if Democrats don’t accept sharp cuts in federal spending. A first-ever default on the federal debt would shatter the market for U.S. Treasurys — the world’s biggest — and possibly cause a global financial crisis.

Since March, America’s financial system has been rattled by three of the four biggest bank failures in U.S. history. Worried that jittery depositors will withdraw their money, banks are likely to reduce lending to conserve cash. Multiplied across the banking industry, that trend could cause a credit crunch that would hobble the economy.

Several big technology companies, including Google and Amazon, have announced layoffs this year. Such job cuts, though, haven’t been widespread enough across the economy to boost the U.S. jobless rate or the number of people applying for unemployment benefits. One reason is that many tech workers who were laid off have quickly landed new jobs.

Pinnacol Assurance, a workers’ compensation insurance firm in Denver, has hired 100 people over the past year and now has a staff of about 700. Some of the newcomers to Pinnacol had been laid off by technology companies.

“They’re double-dipping,’ said Tim Johnson, the firm’s human resources chief. “They’re getting severance, and they’re getting a paycheck.’

Mike Trepper, CEO at Pasco Kids First in New Port Richey, Florida, agreed that a sizable number of job seekers still “have many options.’

His nonprofit, which helps child abuse victims, recently lost two employees, including a therapist who took a higher-paying job in private practice.

Some employers, though, report signs that labor shortages might be starting to ease. Gaston Curk, co-founder of OSM Worldwide, an e-commerce parcel carrier based in Glendale Heights, Illinois, has seen a 55% increase in applicants for open positions over the past six months.

Curk attributed the increase, in part, to more people re-entering the labor market as well as an increase in the company’s starting pay.

Lisa Mason, another Pinnacol human resources executive, has noticed that workers aren’t quite as willing to change jobs as they were a few months ago.

“We are seeing individuals not jumping as much as we had previously seen,’ she said. “They’re strapping in a little bit to see what’s happening in the market, what’s going on with the economy.’

AP Retail Writer Anne D’Innocenzio in New York contributed to this story.

”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.

Buzz: Southern California pay raises have shrunk, falling faster than a more modest national decline.

Source: My trusty spreadsheet looked at first-quarter results from the Employment Cost Index, a pay benchmark that’s carefully watched by the inflation-phobic Federal Reserve. The index tracks private-industry pay in 15 big U.S. job markets – including the region comprising Los Angeles, Orange, Riverside, San Bernardino and Ventura counties.

Topline

Let’s be honest: The Fed’s inflation fight includes trimming raises.

So far, it’s working in Southern California where wages rose at a 4.9% annual rate in 2023’s first three months. That’s down from 5.9% in 2022’s final quarter and down from 5.6% a year earlier. It’s also the smallest rise since the first quarter of 2021.

Historically speaking, though, these raises remain ample salary bumps. In pre-pandemic 2015-19, local wages grew at a 2.6% annual pace.

Nationwide, wages started the year rising at a 4.8% pace, down from 5.1% three months ago but the same 4.8% a year ago. In 2015-19, U.S. wages grew at a 3.4% annual pace.

Meanwhile, look at the Fed’s big worry.

Inflation, as measured by the Consumer Price Index, averaged 5.8% in the first quarter. Yes, that’s below 7.1% three months earlier and 8% at the first of 2022. But remember that the CPI rose at a 1.5% annual rate in 2015-19.

Details

One of the many economic oddities of the pandemic era has been a shortage of workers. That’s made attracting and retaining staff a managerial headache.

As a result, wages have risen sharply and that expense has become a key factor in stubbornly high inflation, especially within labor-intensive service industries.

But the Fed’s inflation battle is tricky because wage movement is a very regional pattern. Consider that of 15 job markets tracked by the Employment Cost Index, nine had shrinking raises over three months and eight had smaller increases over the past year.

Note that thinner pay raises don’t appear to be a California thing. In the Bay Area, first-quarter wages were up 4.7% vs. 4.5% three months ago and 3.8% a year ago.

Bottom line

Yes, it sounds awkward, but the good fortune of workers (substantial pay raises) is part of the inflation problem.

Unfortunately, the only way the Fed can tame inflation is by using high interest rates to cool demand for products and services. Part of the Fed’s bet is that such an economic chill will nudge bosses to minimize staffing and be less generous with pay.

Cal State Fullerton economists believe the Fed’s action will create a “garden-variety” recession and crimp the Southern California job market to no growth during the next two years.

But as Employment Cost Index shows, dramatically slowing wage inflation won’t be easy. Why? Look at what CSUF economists wrote in their forecast:

“In the late stages of a normal business cycle, as inflation, wages, and jobs stay firm, economic activity melts away. This puts pressure on productivity. In fact, productivity behaves quite predictably during the entire business cycle: It rises in recessions as firms cut employment and institute cost-cutting measures and it falls in the late stages of an expansion as firms hold on to their labor force. Companies are even more determined to hoard labor after the traumatic labor shortages experienced post-pandemic.”

Elsewhere

Pay hikes in the other 13 U.S. markets, ranked by one-year wage gains in the first quarter …

Philadelphia: 6.5% – up from 4.4% three months ago and up from 4.7% a year ago.

Miami: 6% – down from 6.8% three months ago but up from 4.6% a year ago.

Seattle: 5.9% – down from 6.2% three months ago but up from 4.5% a year ago.

Washington, D.C.: 5.7% – up from 4.3% three months ago and up from 3.5% a year ago.

Atlanta: 5.6% – up from 4.8% three months ago and up from 3.4% a year ago.

Phoenix: 5.2% – up from 5.0% three months ago but down from 6.4% a year ago.

Dallas: 5.1% – down from 5.5% three months ago and down from 5.4% a year ago.

New York: 4.3% – down from 5.0% three months ago but up from 4.2% a year ago.

Minnesota: 4.3% – down from 5.3% three months ago and down from 5% a year ago.

Boston: 4% – down from 5.8% three months ago and down from 6.1% a year ago.

Detroit: 3.8% – down from 4.1% three months ago and down from 5.1% a year ago.

Chicago: 3.5% – down from 4.4% three months ago and down from 3.8% a year ago.

Houston: 3.4% – up from 3.3% three months ago but down from 5.2% a year ago.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com