Unemployment turning a corner in Marin? Economist sees positive signs
Upbeat signs observed last month in Marin County’s economy could be indications things are improving, an economist suggests, just as the county prepares to reopen more businesses Monday.
Speaking on a Marin Economic Forum webinar Thursday, Robert Eyler, Ph.D., chief economist for the forum , said any positive turn could be dampened by a major spike in COVID-19 cases and a return to more restraints on business.
And on the same day he was speaking, the county recorded its highest single day spike in COVID-19 cases – 54. Then on Friday afternoon, the county announced to delay plans to allow some businesses, such as hotels, to reopen starting Monday. Other places, like hair salons and barber shops, will be allow to welcome visitors back.
Even with the latest virus setback, Marin’s initial unemployment insurance claims are slowing down, “along with a reduced number of job losses that could also be aided by retirements,” said Eyler, who is also professor of economics at Sonoma State University. “It appears we may be turning the corner on unemployment.”
Initial claims for unemployment insurance were higher in Marin County than in Sonoma and Napa Counties in April and May, but on par with Sonoma in March, according to the California EDD.
Last month, U.S. unemployment rose to 13.3% of the workforce with 17.7 million jobs lost since May of 2019. In California, the unemployment rate stood at 16.3% in May, with 3.066 million jobs lost since the same month a year ago. At the same time Marin’s unemployment rate was 10.3% in May 2020 with 21,700 county resident jobs lost since the same month a year earlier.
Comparing last month to May 2019, the county had suffered major job losses by hotels, bars and restaurants (-43.4%). Retail trade showed the next highest loss (-20%) for Marin. The information sector, and total non-farm job losses were both down (-15%) since May 2019 in the county.
California EDD data going back to the pre-COVID era showed relatively high job openings posted in March 2020 within Marin County for occupations such as registered nurses (203 job ads), retail salespersons (200), first-line retail sales worker supervisors (177), secretaries and admin assistants (122), sales representatives (120), customer service representatives (111) and software developers (108).
The cities with the most job ads four months ago included San Rafael (2,332), followed by Novato (1,135), Corte Madera (463) and Mill Valley (432). While this is old data, it serves as a guide to possible openings, and in what locations, today, he said.
In general, coming out of shelter-in-place mandates, the job market is opening up for new hires as well as rehiring employees laid off or furloughed. “We don’t yet know exactly how many businesses were closed or lost in the second quarter, impacting their ability to generate taxable sales, but demand for household goods is spiking along with the need for service personnel.”
Tale of three policies
Eyler commented that what we are experiencing today is a Tale of Three Policies. Social policy is the major influencer affecting business stability and growth more than federal monetary policy or state and local fiscal policy. However, once social policy begins to fade, the other two stimulators will become bigger and have greater impact.
“Trying to conserve jobs at the front end of the pandemic led to business shut downs. We don’t want to see another round of employment cuts and need to bring jobs back quickly. The issue of how keep people in jobs during a crisis is tricky and calls for prudent solutions that involve finding innovative ways to keep people working. If we don’t do this, it could destabilize the business sector,” Eyler said.
He pointed out that the downward economic spiral experienced since March leading to a loss of capacity started with job losses as a first reaction which triggered other problems if businesses were not rehiring. This contributed to business losses (which can occur simultaneously with initial job losses) that changed capacity. When businesses fail, further job losses result in what Eyler called “Labor Force Devolution” — a loss of capacity on both sides of the market.
Housing forecast up
Eyler observed that housing prices and forecasts were looking better in May as the number of days homes for sale were on the market fell to 30+ days in May from approximately 70 days in March. Demand also picked up, as lower interest rates continued to stabilize demand and supply.
The percentage change in home prices, compared to past prices of post-sale median housing prices in selected areas, was up over 70% in Marin this May compared to a 1.4% rise a year ago and a 2.1% rise two years ago, according to Zillow research. Eyler expects slow movement through the rest of 2020 for housing, noting that forecasts do not as yet factor-in the possibility of Great Recession part II.