ORANGE COUNTY, Calif. — Jobs are up in Orange County as they are in the rest of the state, but as inflation looms employers are left wondering when interest rates might shoot up.
The economy is still making gains after pandemic job losses and titanic shifts among employees who switched jobs or took a break from the labor force.
Orange County, in numbers released Friday by the Employee Development Department, showed an increase of 9,800 last month.
“We’re not back to where we were before. We’re still down about 5,200 jobs compared to February 2020,” said Raymond Sfeir, a professor in economics and Director of the A. Gary Anderson Center for Economic Research at Chapman University.
Unemployment sank to 3.1%, in March, down from 3.7% in February. The same the time last year, numbers were estimated at 7%. Hospitality, which saw a job bump of 5,200, largely fueled the winning streak. Construction and government hiring chipped in with 1,600 and 1,500 hires, respectively.
Hospitality has been climbing back into form for months, weathering mask mandates and benefiting from a clientele with a high vaccination rate and keen to get back to life as normal. But there remain many more jobs than people interested in taking them, Sfeir said.
He thinks that will change. Newly retired people may find that inflation, which hit 8.5% in recent days, has taken a bite out of their buying power. Some will leave retirement to return to work while others who considered hanging it up early may keep punching their timecards.
The war between Ukraine and Russia is one of the many variables at play creating questions around the market. But Sfeir said while the oil supply problems have been part of the picture, the larger concern is what will happen with interest rates.
“[The war] has made the supply chain a little bit worse because of the sanctions,” Sfeir said. “It’s very difficult to make payments or receive payments between Russia and the rest of the world.”
Sfeir expects inflation to remain high for the rest of 2022 and into 2023.
Gas prices have also been a source of consternation, assisting in price hikes across the board. Gov. Gavin Newsom has announced various ideas for easing costs for Californians, including gas rebates, while the White House has released gas reserves and loosened up oil drilling on 144,000 acres of federal land.
But much of the near future will rest on interest rates and whether the Federal Reserve raises them to try to staunch record high inflation.
“They will, I think, be increasing the interest rates much more than they thought they would at the end of last year,” Sfeir said. “That could hurt the economy next year.”