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With a diverse local economy, a highly educated workforce and affluent demographics in many areas, Southern California’s Orange County typically avoids the worst of unemployment during recessions.

But the coronavirus crisis has sent the jobless rate in the coastal county to 13.8% in April 2020, and the rate is likely to be even higher when May’s data is calculated.

The total number of jobs in the county – about 1.41 million employees – is similar to levels seen in 2012, as the recovery from the Great Recession was just beginning.

In March and April alone, 77% of the number of jobs gained since the Great Recession were lost, a victim of the stay-at-home orders accompanying COVID-19.

During the last recession, unemployment reached double-digit levels, but just barely, peaking at 10.1%.

Divining the Labor Market

Anil Puri, director of the Woods Center for Economic Analysis and Forecasting at Cal State Fullerton’s Mihaylo College of Business and Economics, anticipates some improvement in the situation as many of the job losses are temporary furloughs that may be reversed as business operations come online.

But a return to the strong job market at the beginning of 2020 is not likely in the foreseeable future, according to his commentary in the Orange County Register this week, in a piece written by renowned business columnist Jonathan Lansner.  

“I expect next month’s number [released in June but covering May’s number] to be as bad, if not worse, than this. But the June rate would be better given the efforts underway to open the economy,” says Puri of April’s dismal numbers. “We have predicted a W-shaped recovery and it very much looks that way.”

According to the Spring Economic Forecast issued earlier this month, Puri and his fellow economist and Woods Center Co-Director Mira Farka expect Orange County joblessness to average 11.1% in the second quarter of 2020, with somewhat better conditions thereafter.

But uncertainty reigns, with coronavirus and a number of other factors complicating the picture.

“There will be a second wave of higher infections this fall and there will be a spate of bankruptcies. We expect household spending to jump in the third quarter relative to the last three months, but then the trend over the next year is going to be moderate and it will move in fits and starts depending on spread of the disease, election results and geopolitical developments,” says Puri.

Orange County Job Market Losers

Which sectors of the Orange County economy have performed the worst during this crisis?

Restaurants have lost 46% of employment – a loss of 68,700 jobs, in only two months, the worst performing sector. Coming in second-worst were hotels, losing 41% of payroll, or 10,700 jobs. And third-worst is arts, entertainment and recreation, declining 39%, or 20,600 positions.

The National Picture

So where does Orange County stand in unemployment compared with the rest of the United States?

On May 22, the Bureau of Labor Statistics released jobless rates for each of the 50 states, covering the April 2020 period.

Lowest joblessness is in Connecticut, where a highly-educated populace has an unemployment rate of but 7.9%. Worst is tourism- and entertainment-heavy Nevada, where a rate of 28.2% exceeds even the worst national numbers in the Great Depression. Second worst is manufacturing-focused Michigan, at 22.7%, followed by tourism-focused Hawaii, at 22.3%, rounding out the only three states with jobless rates in excess of 20%.

Statewide, California’s jobless rate is at 15.5%, above the national level of 14.7%. The state is 10th worst in the nation.