What Does the Main Monthly Jobs Report Tell Us?
Annual Benchmark Revision Slightly Brightens State's Gloomy 2025 Picture. This year's benchmark revision—first reflected in the January release—revised California's 2025 overall job change from a loss of 11k (-0.1 percent) jobs to a gain of 57k (+0.3 percent). The same revision cut national growth from 584k to 116k. The state added 92k jobs over the first three months of 2026, most of which occurred in January (+82k), with little net change across February and March. Taken together, the revised 2025 figures and early-2026 gains represent a less negative picture than previously reported—but not yet a meaningfully different one.
Recovery from the Pandemic Still Lagging. Despite the upward revision and the stronger start to 2026, California's payroll job growth since the pandemic remains below the country as a whole.
Outside Healthcare, State Job Counts Have Declined Over Past Three Years. Cumulative job growth in California since early 2023 is overwhelmingly a healthcare story. The sector has added more than 500k jobs over that span, while all other industries combined have contracted by 126k jobs.
First Quarter Saw Modest Gainst Outside Healthcare. Across January, February, and March, healthcare again led jobs growth but small gains also came from most other major sectors. This is a subtle shift from much of 2024 and 2025, when meaningful monthly gains outside healthcare and government were rare.
What Does the Alternative Household Survey Tell Us?
State's Unemployment Rate Has Fallen Slightly, But Underlying Reasons Are Concerning. The state's unemployment rate fell from 5.5 percent in December to 5.3 percent in March. A declining unemployment rate usually reflects an improving labor market. In this case, however, the underlying data show a less rosy dynamic. Over the three months, the labor force participation rate declined from 62.6 to 62.3 percent, meaning roughly 100k fewer people were working or looking for work. Of that amount, about two-thirds of the reduction came from workers who were employed and one-third came from workers who were unemployed. Overall, the unemployment rate fell because fewer Californians were actively in the labor force. Workers exiting the labor force are no longer counted as unemployed.