Recap: What Does the Main Monthly Jobs Report Tell Us?
August Jobs Report Suggests State's Labor Market Remains Soft. According to the monthly business survey, the state added 4,000 jobs in August and the July report was revised down from +15,000 to -300. With net job losses over the past three months, the state's labor market remains soft and has perhaps weakened slightly.
Alternative Household Survey Now Signaling Similar Softness. An alternative measure of the state's labor market, the monthly household survey, has been more upbeat than the business survey for most of 2025. The household survey reported an average of 25,000 more employed workers each month through June, whereas the business survey reported about 5,000 fewer employees each month. For July and August, however, the household survey has softened to more closely match the state's business survey.
A Closer Look at This Summer's Household Survey Hints at a Labor Market Losing Momentum. The state's household survey of workers and their employment was more upbeat than the business survey for most of the year. Starting in June, however, the household survey has shown a net decline in statewide employment and a slight uptick in the number of unemployed workers. For the three-month period June, July, and August, the state's labor force grew by 50k (one percent annualized growth), the number of employed workers increased 14k and the number of unemployed workers increased 36k. Although we interpret this recent shift with caution because the monthly household survey is a smaller survey with declining response rates, the three-month trend since June would appear to represent a downshift from the more promising incoming data seen earlier this year.
What Do Other Data Sources Say?
Hiring and Layoffs
Consistent with Soft Labor Market, Hiring Has Not Kept Pace With Job Seperations. According to the federal Job Openings and Labor Turnover Survey (JOLTS), California businesses typically hire about 500,000 workers each month and a similar number of workers leave their employment (through layoffs, quits, or other seperations like retirement). Over the past two years, however, employers have hired slightly fewer people than have left employment.
Layoffs Now at Highest Point Since Pandemic, But Quits Climbing Steadily Too. The ratio of monthly quits and monthly layoffs can also shed light on the state's labor market. The labor market is tight when quits are high and layoffs are low, as was the case in 2021 and 2022 during the so-called "Great Resignation" when worker demand was very high and many workers found higher wages by changing jobs. On the other hand, rising layoffs and declining quits have historically occurred during economic downturns. For the moment, although layoffs have risen slightly recently and are now their highest monthly level since the pandemic, quits as well have been inching upward. This suggests that many workers remain at least somewhat confident in their job prospects upon quitting.
Unemployment
Number of Long-Term Unemployed Inching Back Up Over the Summer. The number of workers reporting being unemployed for more than 27 weeks (so-called long-term unemployment) has climbed steadily since early 2023. (The overall number of unemployed workers has also increased over this period.) The long-term unemployed now make up about 30 percent of all unemployed workers, up from 20 percent in 2023.
Average Length of Unemployment Spell Now Five Weeks Longer Than in 2023. The figure below shows the average weeks of unemployment duration for workers who are currently unemployed. As of late 2025, the average unemployment duration has crept up to 26 weeks, about five weeks longer than the 2023 average and higher than the average duration during the 2001 recession.
Unemployment Rising Among Younger Workers. The state's overall unemployment rate has hovered between 5 percent and 5.5 percent for more than a year, but unemployment among younger workers has climbed notably in the past year. As shown in the figure below, the unemployment rate for workers under 25 years old is about 12 percent, nearly three times higher than the unemployment rate for older workers. Rising unemployment among younger workers, many of whom are new entrants to the labor market, suggests demand for workers has softened and as a result the labor market has become more competitive.
Wage Growth
Median Wage Growth Has Slowed From Post-Pandemic Period But Remains Above U.S. Level. The average wage growth for California workers reached nearly 7 percent after the pandemic during the "Great Resignation" but has fallen to around 5 percent in 2025. This level remains slightly above the U.S. wage growth trend.
Industry Sectors
Healthcare and Government Sectors Have Sustained the Job Market, But Government Sector Showing Signs of Losing Momentum. The vast majority of jobs created since the pandemic have been in two large industry sectors--Healthcare and Social Assistance and Government. As shown below, virtually all of the job creation over the past year has been in these two sectors that both rely heavily on public funds for continued expansion. Over the past few months, however, government sector employment growth has lost momentum. Some of this slowdown is due to reductions in federal staffing under the federal administration, but federal government workers only make up a small share of the state's government sector. (The state counts about 250,000 federal employees, 550,000 state employees, and nearly 2 million local government employees, most of whom are school employees like teachers, administrators, and other school staff.) State and Local government employment have also both lost some momentum.