Beacon Economics

June 20, 2025

Beacon Employment Report | California

Presented by Beacon Economics

Copyright © Beacon Economics LLC

California Sees Some Job Growth In Locally Serving Industries

State Unemployment Rate Remains Among Highest in Nation

17,700

Monthly Job Growth

California’s nonfarm payroll jobs increased in the latest data, driven by locally serving industries such as Health Care, Government, and Education.

Total nonfarm employment in the state grew to a seasonally adjusted 18,023,200 in May, an increase of 17,700 positions over the month. California’s labor market stability has been propped up recently by industries that service the local population as opposed to ‘traded’ industries that serve national or international markets.

5.3%

Unemployment Rate

The state’s jobs gains from April were also revised up to 23,300 in the latest numbers; this is 5,400 more than the preliminary estimate of a 17,700 increase.

As is often the case with the monthly employment numbers, there is some contradiction and noise in the data. “ We may be seeing a shift in work arrangements considering that employment is up 114,300 from the start of the year according to the household survey while its only up 12,200 according to the payroll survey,” said Justin Niakamal, Research Manager at Beacon Economics. “Either the household survey is way off, or people are moving toward self-employment and gig work.”

51,700

Monthly Labor Supply Growth

Longer term, employment growth in California continues to trail the nation. Since February 2020 (the start of the pandemic), total nonfarm employment in the state has expanded 2.0% compared to a 4.8% increase nationally. In addition, California grew its payrolls by just 0.5% from May 2024 to May 2025, trailing an 11% increase nationally over the same period.

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

California’s workforce expanded by 51,700 in May, but following the most recent annual revision, it’s evident that the state’s  labor supply has continued along its slow growth trajectory. Since February 2020, California’s labor force has grown by just 178,800 workers, a mere 0.9% increase. This slower growth is being driven largely 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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