California Labor Report: Current Hiring & Employment Trends

California Labor Report – July 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 June.

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A Note from Star Staffing’s CEO

California’s unemployment rate dropped to 5.2% in June — the state’s lowest since May 2024 — even as the state recorded small job losses. The job loss is worth contextualizing: government payrolls drove most of the decline (-7,600), reflecting the predictable summer drawdown as public schools broke for summer.

The story we’re more interested in at Star Staffing is the long-term trend: June marked seven straight months of declining unemployment in California, with 70,000 fewer unemployed residents over that stretch. The state has also contributed 14.9% of total national job growth so far in 2026 — well above its usual share. Here in Northern California, every county we track saw its rate move in the right direction as well (see the county-by-county numbers here).

As always, if you’re currently in need of hiring support, Star Staffing is here to connect you to the right talent for high-demand industries and roles. Reach out to us.

We look forward to digging into the new numbers next month. Until then, take a look at our latest articles: The Benefits of Using a Staffing Firm for Harvest Season and 5 Ways to Increase Employee Engagement This Summer.

– Lisa Lichty, Owner & CEO

Included in this Report

California Labor Market Highlights

Statewide: 5.2% (seasonally adjusted)

MoM: down 0.1%

YoY: down 0.3%

California Highlights:

California’s unemployment rate dropped to 5.2% in June 2026 — down from 5.3% in May and the lowest rate since May 2024. (EDD release)
Month-over-month: The EDD reports a loss of 2,900 nonfarm jobs from May. However, the EDD also notes that government payrolls drove most of the decline, reflecting predictable seasonal school closures.
Year-over-year: Nonfarm employment rose by 106,900 jobs (+0.59%) from June 2025 to June 2026, outpacing the nation’s year-over-year job growth rate on a percentage basis.
Three of California’s 11 industry sectors added jobs in June, led by Private Education & Health Services (+15,500) and Leisure & Hospitality (+1,100).
June marked the state’s seventh consecutive monthly decline in the number of unemployed Californians, with a total of 70,000 fewer unemployed people over that span.

Around the U.S.:

Unemployment rate: The national unemployment rate remained the same at 4.2% in June 2026 — its lowest level in a year (BLS Employment Situation, June 2026)
Nonfarm payrolls grew by about 57,000. That’s “well below expectations,” according to economists. Gains came from professional and business services, social assistance, and health care, while leisure and hospitality lost jobs.
32% of small business owners reported job openings they could not fill in June* — up 3 points from May’s six-year low — per the NFIB’s latest Jobs Report. 62% reported hiring or trying to hire, up 7 points from May. (NFIB Jobs Report, June 2026)

*Note: If you, too, are struggling with filling positions at your company, reach out to us. We’ve got incredible candidates within reach.

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This Month’s Hiring & Work Culture News

Gen Z’s hiring hell is real: 1 in 3 employers admit they’re replacing entry-level roles with AI (Fortune). A new survey finds that a third of employers are actively using AI to eliminate entry-level positions that once launched careers. Worth a read for any manager thinking carefully about team structure and what it means for developing the next generation of talent.

Fortune 500 bosses demanding staff return to the office share one trait: Narcissism, research finds (Fortune). A new study finds that leaders pushing hardest for full-time office returns score higher on narcissistic personality traits than those who take a more flexible approach.

Think the Entry-Level Job Market Is Bad? New Data Shows It’s Actually Worse Than We Thought (Inc). Glassdoor data shows real wages for early-career workers are now below 2020 levels, with inflation (running at 3.8% in April) outpacing pay growth. Important to note that this creates pressure on hourly workers to grab any job they can get their hands on just to pay the bills. Counter-intuitively, that means finding high-quality candidates is proving more difficult for companies, even if you are offering competitive wages.

More From the Team at Star Staffing:

Here are a few of the articles we published on hiring trends and California labor last month.

Northern California Unemployment Rates by County

*Note: Not seasonally adjusted.

Alameda County: 4.4%

Alameda, Oakland, Hayward, Berkeley, San Leandro, Livermore, Pleasanton, Dublin

Marin County: 4.0%

Larkspur, Mill Valley, Novato, San Rafael

Napa County: 4.0%

Napa, Yountville, St. Helena, Calistoga, American Canyon, Angwin

Sacramento County: 4.8%

Sacramento, Elk Grove, Rancho Cordova, Folsom, Citrus Heights, Fair Oaks

San Joaquin County: 6.2%

Stockton, Lodi, Tracy, Manteca, Ripon, Lathrop

Sonoma County: 4.2%

Sonoma, Santa Rosa, Petaluma, Healdsburg, Rohnert Park, Sebastopol, Windsor, Bodega Bay

Solano County: 5.0%

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.

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Star Staffing is a woman-owned, award-winning recruiting and temp hiring firm with 6 branch locations throughout California.

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