California’s unemployment rate is the highest in the nation. Slower job growth is to blame

SACRAMENTO, Calif. — California’s unemployment rate is now the highest in the country, reaching 5.3% in February following new data that revealed job growth in the nation’s most populous state was much lower last year than previously thought.

California lost a staggering 2.7 million jobs at the start of the coronavirus pandemic, losses brought on by Gov. Gavin Newsom’s stay-at-home order, which forced many businesses to close.

The state has added more than 3 million jobs since then, a remarkable streak that averaged just over 66,000 new jobs per month, according to the state Employment Development Department.

But a recent analysis of unemployment data by the federal government revealed that job growth slowed significantly last year. The federal government releases job numbers each month that state officials use to measure the health of the economy. Each year, the federal government analyzes these numbers to see if they match payroll records. Normally, the revisions are small and don’t impact the overall view of the economy.

But this year, while the data initially showed California added 300,000 jobs between September 2022 and September 2023, the corrected numbers released earlier this month show the state added just 50,000 jobs during that period.

“I think California’s economy is the leading edge of the national economic slowdown,” said Sung Won Sohn, a professor of finance and economics at Loyola Marymount University.

Estimating the number of jobs is tricky. The number is based on monthly surveys of workers. The recently corrected numbers show that the survey overestimated job growth in some sectors — with the biggest difference coming in the professional services category, which includes the often high-paying professions of lawyers, accountants and engineers, according to an analysis by the nonpartisan Legislative Analyst’s Office in California.