California Labor Report – August 2026
Each month, Star Staffing, a Northern California-based staffing agency, compiles new data and shares expert insights on the state of hiring in California. This labor report covers the most recent employment data from July.
Pro tip: Sign up for our mailing list to receive next month’s labor report in your inbox as soon as it’s released.
A Note from Star Staffing’s CEO
California’s unemployment rate dropped to 5.1% in July, which is the lowest it’s been since February 2024, but the state also lost 20,500 nonfarm jobs. Unlike last month, that loss wasn’t seasonal but industry-specific: most of the dip came from Professional & Business Services, including Computer System Design, Advertising, and Employment Services.
The bigger story is the long-term trend: July marked eight straight months of falling unemployment statewide, with 87,600 fewer unemployed Californians over that stretch. Our state has also contributed 16.5% of the nation’s job growth this year.
As always, if you’re in need of hiring support, Star Staffing is here to connect you to the right talent. Reach out to us.
We look forward to digging into next month’s numbers. Until then, check out our latest articles: 5 Tips to Make This Bottling Season a Success and What to Include in a Cellar Job Listing.
– Lisa Lichty, Owner & CEO
Included in this Report
California Labor Market Highlights
Statewide: 5.1% (seasonally adjusted)
MoM: down 0.1%
YoY: down 0.4%
California Highlights:
- California’s unemployment rate dropped to 5.1% in July 2026 — down from 5.2% in June and the lowest rate since February 2024. (EDD release)
- Month-over-month: The EDD reports a loss of 20,500 nonfarm jobs from June. However, June’s total was also revised up by 9,000 jobs, resulting in a net June gain of 6,100 jobs.
- Year-over-year: Nonfarm employment rose by 112,700 jobs (+0.63%) from July 2025 to July 2026, outpacing the nation’s year-over-year job growth rate on a percentage basis.
- Four of California’s 11 industry sectors added jobs in July, led by Construction (+2,900) and Trade, Transportation, & Utilities (+2,800).
- June marked the state’s eighth consecutive monthly decline in the number of unemployed Californians.
Around the U.S.:
- Unemployment rate: The national unemployment rate edged down to 4.1%. (BLS Employment Situation, July 2026)
- Nonfarm payrolls unexpectedly fell by about 23,000, following a downwardly revised loss of 20,000 in June. Job losses were concentrated in local government education and retail trade, while health care continued to trend up.
- 36% of small business owners reported job openings they could not fill in July.* That’s up 4 points from June and the highest reading since June 2025, per the NFIB’s latest Jobs Report. 61% reported hiring or trying to hire, down slightly from June.
*Note: If you, too, are struggling with filling positions at your company, reach out to us. We’ve got incredible candidates within reach.
This Month’s Hiring & Work Culture News
- Many workers are turning down promotions. Fast Company reports on new research that finds that many Americans would rather avoid the added stress, even if a promotion comes with a raise.
- AI Is Hitting Entry-Level Jobs Hardest. (Stanford Digital Economy Lab). New research tracking employment among 22-to-25-year-olds in AI-exposed occupations found their job growth is now 19 percentage points behind where it would be otherwise. Worth a read for any manager thinking carefully about how AI is reshaping who gets hired at the entry level.
- That said, employers who laid off workers citing AI now regret it, according to CNBC. That includes Ford and IBM.
More From the Team at Star Staffing:
Here are a few other articles you might like.
- 7 Summer Safety Tips for Employees Working in the Heat
- Why Making Safety a Top Priority is Beneficial to Your Company
- 3 Powerful Benefits of Using a Staffing Firm for Contingent Hiring
Northern California Unemployment Rates by County
*Note: Not seasonally adjusted.
Alameda County: 4.6%
Alameda, Oakland, Hayward, Berkeley, San Leandro, Livermore, Pleasanton, Dublin
Marin County: 4.2%
Larkspur, Mill Valley, Novato, San Rafael
Napa County: 4.2%
Napa, Yountville, St. Helena, Calistoga, American Canyon, Angwin
Sacramento County: 5.1%
Sacramento, Elk Grove, Rancho Cordova, Folsom, Citrus Heights, Fair Oaks
San Joaquin County: 6.4%
Stockton, Lodi, Tracy, Manteca, Ripon, Lathrop
Sonoma County: 4.3%
Sonoma, Santa Rosa, Petaluma, Healdsburg, Rohnert Park, Sebastopol, Windsor, Bodega Bay
Solano County: 5.3%
Fairfield, Vacaville, Vallejo, Benicia, Suisun City, Dixon, Rio Vista
Stanislaus County: 7.0%
Ceres, Modesto, Oakdale, Patterson, Riverbank, Salida, Turlock
Yolo County: 5.6%
Davis, West Sacramento, Woodland
Note: For Southern California unemployment rates, see edd.ca.gov.
Don’t forget to sign up to receive our monthly labor report in your inbox as soon as it launches. Newsletter subscribers get access to special reports, including annual recaps, extra California salary data, and hiring advice — don’t miss out!
Star Staffing is a woman-owned, award-winning recruiting and temp hiring firm with 6 branch locations throughout California.