What Does the Main Monthly Jobs Report Tell Us?
Payroll Jobs Dip in September, And August Gains Revised Down. State employment declined by 9,300 in September, and August’s initially reported gain of 39,400 was revised down to 23,100. Overall, statewide payroll employment has been essentially flat since January.
Early Revision Suggests Early 2026 Job Growth Was Slower Than Reported. Early benchmark estimates from the Federal Reserve Bank of Philadelphia suggest the state added about 30,000 jobs across January, February, and March, whereas the preliminary survey estimates counted 100,000 job gains during that period. Based on the early benchmark estimates, job growth so far in 2026 now appears to have been about 2,000 jobs per month (and not the 10,000 jobs per month as initially reported).
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 September (by 16,000) and the labor force shrunk by a larger amount (21,000). Since January, the labor force has fallen by 384,000 workers and employment by 289,000.
State's Unemployment Rate Held at 5.1 Percent, With Recent Decline Driven by Labor Force Exits. The state's unemployment rate remained at 5.1 percent in September after declining somewhat earlier in the year. 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 nine months, the labor force participation rate declined from 62.6 to 61.4 percent, meaning roughly 380k 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 has fallen of late 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.