Beacon Economics

May 16, 2025

Beacon Employment Report | California

Presented by Beacon Economics

Copyright © Beacon Economics LLC

CALIFORNIA’S SLOW-GROWTH LABOR MARKET CONTINUES TO TRAIL NATION

Housing Shortage an “Elemental” Problem Constraining Growth

17,700

Monthly Job Growth

California’s nonfarm payroll jobs increased in April, but employment growth in the state continues to trail the nation.

Since February 2020 (the start of the pandemic), total nonfarm employment in California has grown 1.9% compared to a 4.7% increase nationally. In addition, the state increased payrolls by just 0.4% from April 2024 to April 2025, trailing the 1.2% increase nationally over the same period.

5.3%

Unemployment Rate

As the annual revision in March indicated, California’s labor supply is growing slowly. Since February 2020, the state’s labor force has grown by just 126,100 workers, a 0.6% increase; it grew by 39,700 in the latest numbers (April). This slower growth is being driven largely by the state’s chronic housing shortage and the retirement of aging workers.

“It’s difficult to see how California will be able to break out of its slow-growth cycle when there has been virtually no increase in housing production,” said Justin Niakamal, Research Manager at Beacon Economics. “This is an elemental problem that is impacting the state’s ability to grow its population, industry, and economy.”

39,700

Monthly Labor Supply Growth

In the latest numbers (April), nonfarm employment in California expanded to a seasonally adjusted 18,000,100, an increase of 17,700 positions over the month. The state’s labor market remains stable but continues to be propped up by locally serving industries such as Government, Education, and Health Care. March’s jobs gains were also revised up to a 6,800 decline, a 4,800 increase from the preliminary estimate, which assessed an 11,600 decline.

California’s unemployment rate held steady at 5.3% in April, unchanged from the previous month. The state’s unemployment rate remains among the highest in the nation, with only Michigan, Washington D.C., and Nevada exceeding California’s rate.

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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