What Does the Main Monthly Jobs Report Tell Us?
Payroll Jobs Decline in July, Following Flat Trend. State employment declined 20,000 in July, and June's small decline was revised upward to a small gain. Payoll job growth has been essentially flat since January, with the largest declines in Business and Professional Services being offset by continued gains in Healthcare Services.
What Does the Alternative Household Survey Tell Us?
Household Survey Decline Continues. 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 July (by 52,200) and the labor force shrunk by a larger amount (70,200). Since January, the labor force has fallen by 310,000 workers and employment by 235,000.
Apparent Improvement in State's Unemployment Rate Driven by Labor Force Exits. The state's unemployment rate fell from 5.2 percent in June to 5.1 percent in July. 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 eight months, the labor force participation rate declined from 62.6 to an estimated 61.6 percent, meaning roughly 300k 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.