The Center for Jobs and the Economy has released our full analysis of the January Employment Report from the California Employment Development Department. For additional information and data about the California economy visit www.centerforjobs.org/ca. 

The January employment data incorporates the annual benchmark revisions, with changes to the wage and salary jobs data extending back in general to 2020 for the seasonally adjusted series and in some cases back to 1976. The labor force revisions extend back to 1976 as well. The Center’s data series have been updated with the new data for states and MSAs. The data for counties, regions, and legislative districts will be similarly revised after the data release later this month. In the short interim, comparisons between the January results for these sub-state regions and prior months should take into account the differences in the benchmark series.

This month’s report primarily addresses the data revisions but also includes the preliminary results released for January. The surveys used for the January numbers likely were affected by two factors, however: the Los Angeles fires in the case of California and severe winter storms in some of the other states. The extent of these effects are uncertain, but as usual, a multi-month comparison will be more insightful.

Throughout the preliminary data in 2024, California’s net job performance since the pandemic placed it in 3rd place consistently behind Texas and Florida. Under the revised data, California drops to 4th place behind North Carolina. Compared to pre-pandemic February 2020, California’s economy expanded by 368,500 jobs, compared to 1.3 million for Texas, 932,500 for Florida, and 410,600 for North Carolina.

The type of jobs behind these recovery numbers is also important. As discussed in prior reports, California’s job growth has been dominated by government and government dependent jobs in Healthcare & Social Assistance. Using the unadjusted series, Social Assistance—composed primarily of minimum wage, part-time, government paid jobs in In-Home & Supportive Services (IHSS)—was responsible for 55% of the Healthcare & Social Assistance jobs growth in California—and 2/3 of total net jobs growth. This source comprised only 4% to 16% in the other states.

Trade related jobs in Transportation, Trade & Utilities have been the one bright spot in the state’s recovery progress, but as indicated in the Texas numbers, California’s lead in this area has been under increasing competition from other regions. In the other private industries, the recovery picture is one of contraction in California, including the two primary Tech Sectors (Information and Professional, Scientific & Technical Services).

To put it more directly, other than in Trade, California has not grown jobs during the past 4 years of recovery; it has bought them with public funds. California has not expanded its tax base; it has used that tax base to cover its competitive weakness for private sector jobs. And the jobs California has bought are not the “well-paying” jobs promised in the state’s economic development goals, but are predominantly minimum wage, part-time, and limited term.

Adjusting for population size, California’s overall job performance since February 2020 notched up to 29th highest among the states. In the revised data, only 4 states and DC remain below their pre-pandemic levels.

Looking at the more recent trend, California saw no changes to nonfarm jobs in January. That result put California at 32nd highest, while job growth was led by Texas at 27,900, New York at 20,100, and Florida at 16,500.

For the year January 2024 to January 2025, California ranked 18th with a total gain of 22,400. Texas led with 187,700 followed by New York at 166,500 and Florida at 139,000.

Government and government supported jobs continued to be the primary source of growth within the state, posting a sizeable rise over the month and providing the only compensating growth over the year as the state’s labor conditions and rising costs of doing business saw contraction in all but 3 of the other private industries.

Weakness in the number of jobs was accompanied by a contraction in average number of weekly hours worked. Overall for Private Industry, hours edged down 1.5%, while dropping to greater extents for Information and Private Education & Healthcare. Hourly wage gains were positive in all industries except Trade, Transportation & Utilities, but these gains likely contributed to the pull-back in hours as employers adjusted to the higher costs.

With the change in the administration in Washington, the agencies are finally incorporating the effects of the high immigration of recent years into the various population-based data series including the labor force data. As a result, while California’s 2024 employment numbers were particularly weak in the preliminary data, the outcome is much stronger in the revised results. California employment in January was up 17,600 for the month and 69,600 for the year, while the total labor force grew 11,300 for the month and a healthy 137,800 for the year.

Compared to pre-pandemic conditions, employment still was 132,400 short of recovery. California was one of only 5 states still short of recovery in the revised data.

Even with the revised data, California’s unemployment problems remained a stark outlier among the states. California’s unemployment rate (seasonally adjusted) notched down by 0.1 point to 5.4%, but this level remained the 2nd highest among the states behind only Nevada. 

The total number of unemployed showed only marginal improvement to 1,069,100. January was the 13th month in a row California saw more than a million unemployed workers.

After an initial surge, the number of initial claims measured on a 4-week moving average basis have begun to follow the overall trend from 2024.

The number of workers receiving unemployment—as measured by insured unemployed (a proxy for continuing claims)—also is tracking near the 2024 levels. Overall, insured unemployed remains well above historic levels.

California’s caseload also remains well above—nearly double—its overall share of jobs. California insured unemployment was 21.1% of the national total in the latest results (4 week moving average), while initial claims were at 20.0%.