California employers added 39,400 jobs in August, but the number of Californians reporting that they were employed fell by 36,600. Here’s what the state’s latest employment numbers show — and what they don’t.
California added 39,400 nonfarm payroll jobs in August, while the state’s unemployment rate remained at 5.1%, according to the California Employment Development Department’s August employment report.
At first glance, that sounds like a stronger job market.
But another set of numbers in the same report tells a different part of the story: The number of Californians who reported being employed fell by 36,600 from July, while the state’s labor force, people who are working or actively looking for work, declined by 50,500.
Understanding why those numbers can move in different directions is important for anyone trying to understand California’s job market.
California added jobs, but not necessarily workers
The 39,400 figure comes from a survey of about 80,000 California businesses. It measures the number of payroll jobs at businesses.
The employment figure comes from a separate survey of about 4,400 California households. It measures people who are employed or unemployed.
Those are different measurements.
In August, California had about 18.18 million nonfarm payroll jobs, up 39,400 from July and 138,500 from August 2025.
But the household survey found 18.51 million Californians employed — 36,600 fewer than in July and 246,700 fewer than a year earlier.
The labor force also shrank by 50,500 people in August.
That helps explain how the unemployment rate could remain at 5.1% even as the number of employed Californians declined.
Where California gained jobs
The strongest monthly growth was concentrated in several industries.
Private education and health services added 18,600 jobs in August. Government added 9,800, leisure and hospitality added 7,800, and trade, transportation and utilities added 6,900.
Health and education have been particularly important to California’s job growth. The private education and health-services sector has added 131,500 jobs over the past year, according to EDD.
For readers interested in how work is changing for Latino workers and entrepreneurs, Parriva has also examined the growth of independent work in Latina Are Driving the Freelance Boom as Work and Wages Shift.
Other industries continued to lose jobs
The gains were not spread evenly across the economy.
Professional and business services lost 1,800 jobs in August. Information lost 900, financial activities lost 700 and construction lost 600.
Compared with August 2025, California’s information sector was down 22,600 jobs, professional and business services was down 15,500, financial activities was down 13,000 and manufacturing was down 10,100.
That means the statewide job total can rise even while workers in particular industries face a weaker market.
For small-business owners, the broader employment picture also matters because hiring, consumer demand and business costs can move in different directions. Parriva’s guide on How California Small Businesses Can Get Government Contracts looks at another part of the state’s changing business environment: where smaller companies can find new sources of work.
What about Latino workers?
California’s overall employment report does not provide a direct monthly August unemployment rate specifically for Latino workers.
A separate analysis of Current Population Survey demographic data puts California’s Latino unemployment rate at 5.5%, compared with 5.1% for the state overall, 4.9% for White workers and 3.9% for Asian workers. But that demographic figure is based on a 12-month moving average, not the same monthly measure used for the headline state unemployment rate.
It means the available data can show that Latino workers have experienced a different unemployment rate than some other groups, but they cannot tell us that Latino workers specifically drove the August decline in California’s labor force.
Parriva has also examined how changes in immigration and the workforce are affecting Los Angeles businesses in Immigration Slowdown Is Reshaping LA’s Economy And Small Businesses Are Struggling. That broader context should not be confused with the specific August employment figures, but it helps explain why workforce changes can have consequences beyond the unemployment rate.
The numbers may still change
There is another reason to be cautious about drawing a broad conclusion from one month’s payroll report.
The California Legislative Analyst’s Office analysis of the August jobs report noted that preliminary monthly employment estimates have been considerably more positive than early benchmark estimates based on more complete administrative data.
The initial monthly reports indicated California had added about 100,000 jobs during January through March. Early benchmark estimates suggest the actual gain during that period may have been closer to 30,000.
Based on those early benchmark estimates, the LAO said job growth during 2026 could be averaging closer to 5,000 jobs a month rather than the roughly 15,000 indicated by the preliminary monthly reports.
Those are preliminary revisions, not a replacement for the August report. But they are a reminder that employment data can be revised as more complete information becomes available.
So, is California’s job market improving?
The August numbers don’t provide a simple yes-or-no answer.
California added jobs at businesses.
At the same time, fewer Californians reported being employed, and the labor force continued to shrink.
The strongest job growth is concentrated in industries such as health care, education, government and leisure and hospitality, while several other sectors continue to lose jobs.
The state’s unemployment rate is also below where it was a year ago. But the decline in unemployment is occurring alongside a smaller labor force, which means the unemployment rate alone does not describe everything happening in the labor market.
For workers, the more useful question may therefore be less about whether California “added jobs” and more about where those jobs are being created, who is finding work and which workers are still looking for opportunities.
California’s September employment data are scheduled for release October 16, according to the state’s 2026 labor-market data release schedule.
What the August numbers cannot tell us
The report cannot, by itself, explain why 50,500 people left California’s labor force in August.
It also cannot tell us whether those people stopped looking for work because they found other opportunities, retired, returned to school, became discouraged or for another reason.
And it cannot establish from the August statewide numbers alone how Latino workers experienced the month.
Those questions require additional demographic and labor-market evidence.
For now, the clearest takeaway is this:
California’s employers added jobs in August, but the state’s labor market remains more complicated than the headline number suggests.
