What Does the Main Monthly Jobs Report Tell Us?
Early 2026 Data Now Appears No Stronger Than 2025 Trends. The state saw a net loss of 3k jobs in April. The state had added a total of 15k jobs over February, March, and April. This is roughly the same pace of job growth seen during 2025. Last month we noted, cautiously, that early 2026 figures appeared "less negative but not yet meaningfully different" than the 2025 trends. April's neutral figures confirm that 2026 is not yet meaningfully different than the middling trends seen during 2025. January's spike (+82k jobs) seems more and more like an anomaly than the beginning of a sustained improvement.
Recovery from the Pandemic Still Lagging. Despite an upward revision to California jobs for 2025 and a downward revision to national jobs for the same period, California's payroll job growth since the pandemic remains below the country as a whole.
Healthcare Sector Continues to Carry State's Labor Market. The healthcare and Social Assistance sector added about 10k jobs in April, offsetting roughly flat or declining jobs in most other sectors. The healthcare sector has now added more than 515k jobs over that span, while all other industries combined have contracted by 130k jobs.
Brief Gains Outside Healthcare Slid Back to Trend in April. Across January, February, and March, healthcare led jobs growth but small gains also came from most other major sectors. This was a subtle shift from much of 2024 and 2025, when meaningful monthly gains outside healthcare and government were rare. With an additional month of data, sectors that had shown modest improvement during 2026Q1--including construction, information, real estate, business services, and personal services--again turned negative in April.
What Does the Alternative Household Survey Tell Us?
Household Survey Has Turned Negative. 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 by 43k in April, marking a three-month decline of 105k.
"Improvement" in State's Unemployment Rate Driven by Shrinking Labor Force. The state's unemployment rate fell from 5.5 percent in December to 5.3 percent in March (and remained at 5.3 percent in April). A declining unemployment rate usually reflects an improving labor market. In this case, however, the underlying data show a less rosy dynamic. Over the five months, the labor force participation rate declined from 62.6 to 62.1 percent, meaning roughly 160k 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 who leave the labor force because they cannot find a job (or for any other reason) are no longer counted as unemployed.