What Does the Main Monthly Jobs Report Tell Us?
Payroll Employment Has Been Flat Since January. State employment declined 2,900 in June, and May was revised downward for a decline of 15,600. Payoll job growth has been essentially flat since January.
What Does the Alternative Household Survey Tell Us?
Household Survey Decline Deepens. While the official business survey shows continued stagnation, the household survey of workers shows a clear deterioration since the start of 2026. The number of employed workers fell again in June (by 34,800) and the labor force shrunk by a larger amount (48,700). Since January, the labor force has fallen by nearly 250,000 workers and employment by 180,000.
Apparent Improvement in State's Unemployment Rate Driven by Labor Force Exits. The state's unemployment rate fell from 5.3 percent in May to 5.2 percent in June. A declining unemployment rate usually reflects an improving labor market. In this case, however, the underlying data show a less rosy dynamic. Over the last seven months, the labor force participation rate declined from 62.6 to an estimated 61.8 percent, meaning roughly 200k fewer people were working or looking for work. Of that amount, about three-quarters of the reduction came from workers who were employed and one-quarter came from workers who were unemployed. Overall, the unemployment rate fell because fewer Californians were actively in the labor force. Workers who leave the labor force because they cannot find a job (or for any other reason) are no longer counted as unemployed.