Beacon Economics

April 18, 2025

Beacon Employment Report | California

Presented by Beacon Economics

Copyright © Beacon Economics LLC

CALIFORNIA’S LABOR MARKET: AN EXPORT EXODUS

Locally Serving Industries Are Carrying The Load In Latest Data

11,600

Monthly Job Decline

California’s labor market contracted in March, and is being propped up by industries that serve local populations such as Government, Education, and Health Care.

“There’s an export exodus in the state,” said Justin Niakamal, Research Manager at Beacon Economics. “Virtually every export sector in the state has fewer jobs now compared to last year, which is doubly concerning considering the tariff talk coming out Washington… California’s current job growth is being led almost exclusively by the Government and Healthcare sectors.”

5.3%

Unemployment Rate

The state’s labor market remains stable but total nonfarm employment in California fell to a seasonally adjusted 17,977,600 in March, a decrease of 11,600 positions, according to the new report. January’s jobs gains were also revised down to a 21,800 decline in the latest numbers, a 14,300 decrease from the preliminary estimate of a 7,500 decline.

Employment growth in California continues to trail the nation. Since February 2020 (the start of the pandemic), total nonfarm employment in the state has grown 1.8% compared to a 4.7% increase nationally. In addition, California increased payrolls by just 0.3% from March 2024 to March 2025, trailing the 1.2% increase nationally over the same period.

7,600

Monthly Labor Supply Growth

California’s unemployment rate dropped to 5.3% in March 2025, a 0.1 percentage-point decline from the previous month. At 5.3% California’s unemployment rate remains among the highest in the nation. Only Michigan, Washington D.C., and Nevada having higher rates of unemployment.

The most recent annual revision showed that California’s labor supply is growing slowly . The state’s labor force grew by 7,600 in March, but since February 2020, it has grown by just 85,700 workers, a mere 0.4% increase. This slower growth is being driven primarily by the state’s housing shortage and the retirement of aging workers.

The Beacon Employment Report | California is a unique analysis of California’s employment numbers and trends. Each month, we link our own econometric predictions to data released by the U.S. Bureau of Labor Statistics and the California Employment Development Department to identify important changes in employment across industries and regions. The Beacon Employment Report is also one of the few analyses that uses seasonally adjusted numbers, which are critical to revealing accurate trends and insights within data. The analysis is a sample of the kind of research available from Beacon Economics.

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