California Is Now Leading the Nation in Unemployment According to New Data

By: Alex Trent | Published: Mar 25, 2024

Newly published data from California’s Employment Development Department shows that the state just hit 5.3% unemployment in the month of February. This puts the state’s unemployment rate in first place among all states in America.

Experts were hoping that job growth numbers would be better, however, fewer job gains continue to push the California unemployment numbers higher.

Unemployment Uptick

California’s unemployment continues to defy financial analysts’ hopes as it continues to gradually tick up month after month. In February 2023, the unemployment rate was 4.5%, with it reaching 5.2% in January 2024.

A man writing in a notebook.

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California has been competing neck and neck with Nevada which had a 5.2% unemployment rate in February. However, California inched its way to the top with a 5.3% estimated unemployment rate during that month.


Revised Job Estimate

Analysts had put forward an optimistic job growth rate for the state of California in January that was met with disappointment. 

A group of construction workers.

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In January, it was estimated that the state would add 32,500 non-farm jobs to the workforce. However, that number was drastically reduced to 25,600 after data from surveys became available.

Job Loss

Because of the unprecedented conditions of the COVID-19 pandemic, California has been slowly recovering jobs after a massive loss. The state had lost around 2.7 million jobs over the course of the pandemic, as businesses were forced to shut down and people had to quarantine.

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This job loss hit California’s economy hard. It is the most populous state in the United States, making the effects felt by more people.

Slowing Recovery

Experts were hopeful for a quick recovery after restrictions were lifted and at first they were right. California has added 3 million jobs since the pandemic restrictions ended. 

A man walks through his workplace while wearing a yellow construction hat.

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However, it seems these job growth rates weren’t meant to last. In the past year, the growth of new jobs has slipped significantly.

Corrected Numbers

One problem that might explain the disappointing numbers is confusion in the data. Data had initially shown that California had added 300,000 jobs between September of 2022 and 2023. 

A dynamic industrial scene showing several large pieces of heavy machinery in operation within an open pit mine. Bright yellow excavators and dump trucks are actively moving earth, with one excavator in the process of loading a truck

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However, revised numbers released recently showed that this number was actually much smaller, likely only 50,000 jobs were added during this period.


Slowdown Leader

Some experts are predicting that California is showing the first signs of what may be to come for future states across America. Loyola Marymount University finance and economics professor, Sung Won Sohn, thinks a national slowdown is on the horizon.

California Governor Gavin Newsom speaking at a podium.

Source: Government of California/Wikimedia

“I think California’s economy is the leading edge of the national economic slowdown,” Sohn said.


Mounting Deficit

These job numbers are not a good sign for California, whose state budget is projected to have a historic deficit in the tens of millions.

Person handing a stack of cash over a desk to another person

Source: Freepik

Gavin Newsom’s office estimates this deficit to be around $37.9 billion but an independent estimate from the Legislative Analyst’s Office puts the figure closer to $73 billion.


Budget Sacrifices

The state’s economic slowdown as evidenced by continuing disappointing jobs numbers has some thinking that things need to change. Lawmakers are hard at work trying to figure out how to balance these concerns with the budget deficit.

A large hole is shown in the center of a black image.

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“The quicker we move, the better it is for California,” California Senate Leader Mike McGuire said. “We are going to have to make sacrifices. But early action means that we can bring this deficit to a more manageable level.”


James Gallager’s Comments

California Assembly Leader James Gallager issued a statement to Fox Business remarking on the state’s economy and placing the blame on Democrats.

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“Who would have guessed that high taxes, expensive energy, and rampant crime are bad for the economy? California workers are dealing with the consequences of Newsom’s far-left agenda,” Gallagher said. “If Democrats don’t stop punishing job creators and rewarding criminals, things are only going to get worse.”


What is the Unemployment Rate?

The government measures the estimated unemployment rate by taking the number of unemployed workers seeking jobs in the workforce as a percent of the working ones. 

A hiring sign in a business window.

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This number is calculated by taking the unemployed workers and dividing it by the labor force numbers. Then it is multiplied by 100 to make it a percentage. This number doesn’t include people who aren’t looking for work and certain age groups like retired adults or children.


Unemployment Average

In February, the seasonally-adjusted unemployment rate was estimated to be around 3.9% in the United States. 

A map showing the places that are lit up in the United States at night.

Source: NASA

The data shows that the average United States unemployment rate has been fairly consistent since many pandemic restrictions ended. In February of 2022, it was at 3.8% but has dipped down to 3.4% at some points from then until now. The current 3.9% is the highest it has been in a few years.