Who Is Unemployed in California?

Despite signs of strength in California’s economy, unemployment has ticked up, including a surprising drop in employment among men and new patterns across age groups. This uptick may be due to the Fed’s actions to slow the economy to temper ongoing inflation, which often coincides with a rise in unemployment and with recession. While recession does not seem imminent, the rise in unemployment might signal areas of concern for the state’s economy, and challenges for those impacted.

California’s unemployment rate is the third highest in the nation: as of July, 4.6% of California’s labor force is unemployed—or about 885,000 residents. That rate reflects a steady climb over the past year and brings California above the US rate (3.5%). While it is typical for the California rate to be higher than the US rate—historically driven by the state’s younger and faster growing workforce—the unemployment picture remains substantially better than at almost any point in the past 40 years. Aside from the recent low in 2022 and in the two years before the pandemic, unemployment has not been as low as it is today since 1976.

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