California coronavirus unemployment surges as payrolls shrink for first time since 2010

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Myra Madrid, who worked for 10 years at Four Seasons in Beverly Hills, was among those visiting a food bank at L.A.'s Hospitality Training Academy in March. (Carolyn Cole / Los Angeles Times)

California’s unemployment rate shot up in March as a statewide coronavirus shutdown took effect and overall payrolls shrank for the first time in a decade, state officials reported Friday.

The March report showed a jobless rate of 5.3%, up from 3.9% in February, the largest jump in more than four decades of state data collection. But the rate is based on a survey that ended March 12, so it doesn't reflect the positions axed by thousands of employers in the second half of the month.

Through the first half of the month, the state lost 99,500 jobs. That ends a record 120-month streak of gains since the Great Recession.

Both the U.S. jobless rate, which was 4.4% in March, and California’s rate have skyrocketed in recent weeks, according to economists who predict the state’s unemployment rate this year could climb to more than 16% and perhaps as high as 20%.

"California employment is in free fall and no bottom is yet in sight,” said Sung Won Sohn, a Loyola Marymount University economist. “Economic activities won’t recover sharply even when the lockdown ends.”

The grim news came the day after federal officials reported that 660,966 Californians had filed jobless claims in the week that ended April 11. Over four weeks, 2.7 million claims were processed statewide, amounting to 1 of every 7 workers in the state’s 19.3-million-person labor force.

Nationwide, some 22 million people have sought unemployment benefits in the last month, the largest number on record. In the Great Recession, employment declined by 8.6 million workers between November 2007 and December 2009.

The number of California jobs lost in March was the fourth-largest on record, driven by declines in six of 11 industry sectors. The leisure and hospitality sector shrank the most — losing 67,200 positions — largely because of closures of hotels, restaurants, food services and bars.

“This is just the tip of the iceberg of what we are likely to see when the April California employment report is released,” said Scott Anderson, chief economist of the Bank of the West in San Francisco. “No sector of the economy will be spared before the job losses will be over.”

The state's "other services" sector, which covers a mixture of businesses such as auto repair and dry cleaning, lost 15,500 positions. The construction sector shrank by 11,600.

The professional and business services sector, which includes some technology jobs, dropped by 8,600 positions. The manufacturing sector lost 5,300. The trade, transportation and utilities sector shrank by 4,600.