Los Angeles Regains Half of the Jobs Lost at Start of the Pandemic

Los Angeles is slowly recovering from the dramatic job losses at the start of the pandemic. The market has regained more than half of the jobs lost since March, and the unemployment rate has inched down 300 basis points since September to land at 12.1%, according to a new report from CBRE.

“Most of the job gains we are seeing in L.A. and elsewhere in the region represent a rebound from the unprecedented and immediate drop in employment in April,” Eric Willett, our regional director for research and thought leadership, tells GlobeS.com. “Most of the jobs eliminated then were a temporary response to new social distancing restrictions, and employers have brought back many of the roles that were furloughed or eliminated in those early months of the pandemic. In the past two months, seasonal hiring—especially in transportation and warehousing—has been an additional boon to the regional employment market.”

The recent jobs lost at the beginning of the pandemic were temporary furloughs, but as the recession wears on, more of these job losses are becoming permanent. “The overwhelming majority of jobs lost in the first two months of the pandemic were short-term losses,” says Willett. “Since May, however, long-term job loss has slowly increased even as the short-term unemployed return to work in large numbers.”

The job recovery thus far is a good indicator that office space will also rebound. “The recovery in office-using jobs is undeniably a good sign for the regional office market,” says Willett. “However, it increasingly looks likely that activity in the office sector won’t pick-up until the pandemic subsides and tenants are able to reoccupy spaces that have sat vacant for the better part of a year.”

Seasonal jobs are also playing a role in the decrease in unemployment. More industrial activity has fueled seasonal employment in warehouses and delivery services, rather than retail. “The increase in seasonal hiring highlights the dramatic shifts underway in commercial real estate demand,” says Willett. “The substantial build-up in industrial employment, in particular, underscores how important industrial real estate has become as consumers shift to online buying during the pandemic.”

These employment gains are gaining momentum, and Willett expects to see increased employment through the next year. “We expect continued employment growth through 2021 with an additional 240,000 jobs added as the vaccine is distributed and the economy recovers from the pandemic shock.”