California's economic recovery slowed markedly last month as COVID-19 infections rose and the state resumed shutting businesses.
Employers added just 140,400 payroll jobs from mid-June to mid-July to a total workforce of nearly 15.8 million, state officials reported.
The July job gain was dramatically less than the record 542,500 rise the previous month when restaurants, stores and other businesses briefly reopened amid hopes that the virus was abating.
California's unemployment rate lowered to 13.3% last month, down from 14.9% in June, but part of the decline was due to a drop in people looking for work.
In June, the state's labor force expanded by 464,000 as many furloughed workers returned to their jobs. But last month it shrank by 167,000 as businesses closed again.
For the week that ended Aug. 15, California's new unemployment claims fell to their lowest level in five months, as 345,000 applications were submitted to the state Employment Development Department. But 4.8 million Californians were still collecting jobless benefits.
A federal supplement of $600 a week expired at the end of July. That's expected to push more Californians to seek work this month, said Michael Bernick, a former EDD director.
"California's local workforce boards and employment agencies are reporting an increase in job applicants," he said. "But with the economic lockdowns, the jobs are not coming back in any significant numbers.
"In fact, the opposite is occurring. California businesses continue to announce that they are closing permanently. Any economic recovery we saw in June and early July has stalled, and a listlessness set in."
The U.S. jobless rate of 10.2% was significantly lower than California's in July, and the nation's payrolls grew more than California's: 1.3%, as compared with 0.9%.
The comparatively better national picture reflects the fact that many other states have either succeeded in tamping down the spread of the coronavirus or have been reluctant to close businesses despite high infection rates.
Over the last three months, California has regained less than a third of the 2.6 million positions lost during March and April as the pandemic took hold.
As of Friday morning, California has reported more than 653,000 cases of COVID-19 and more than 11,800 deaths.
"Difficult times remain ahead," said Lynn Reaser, an economist at San Diego's Point Loma Nazarene University. "Forty-two of California's 58 counties are currently on the state's COVID-19 watch list, which means bans on a significant number of indoor activities, including gyms, restaurant dine-in service, museums, indoor malls and hair salons. People also remain cautious about venturing out."
