California Labor Report – June 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 May 2026.
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A Note from Star Staffing’s CEO
California’s unemployment rate held steady at 5.3% in May for the third month in a row. The state also added 3,100 nonfarm jobs in May.
Zoom out, and the year so far looks even better: California has added 103,600 jobs since January, and the state has accounted for 18.2% of all U.S. job growth this year (well above its usual ~11% share of the national job market).
On the unemployment side, May marked six straight months of declines in the number of unemployed Californians, down 8,800 from April and 56,600 lower than six months ago. Here in Northern California, we saw the unemployment rate drop in every one of the counties we support (see the numbers at the end of this report).
Not a bad way to begin the summer.
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: 5 Ways to Increase Employee Engagement This Summer and Why Making Safety a Priority is Beneficial to Your Company.
– Lisa Lichty, Owner & CEO
Included in this Report
- California labor highlights (unemployment rates, industry details, etc.)
- This month’s work culture news
- California unemployment rates by county
- California labor law news and policy changes (if applicable)
- Great reads and resources
California Labor Market Highlights
Statewide: 5.3% (seasonally adjusted)
MoM: Same
YoY: down 0.2%
California Highlights:
- California’s unemployment rate held steady at 5.3% in May 2026, marking the third straight month at that level. (EDD release)
- Month-over: Total nonfarm jobs in California came in at 18.2 million in May, with a gain of 3,100 jobs for the month.
- Year-over-year: Total nonfarm employment rose by 102,900 jobs (0.57%) from May 2025 to May 2026, again outpacing the nation’s year-over-year job growth rate on a percentage basis.
- Six of California’s industry sectors added jobs in May, led by Private Education & Health Services (+6,200) and Leisure & Hospitality (+5,900).
- May also marked the state’s sixth consecutive monthly decline in the number of unemployed Californians (-8,800), bringing the total to 56,600 fewer unemployed people than six months ago.
Around the U.S.:
- Unemployment rate: The national unemployment rate held steady at 4.3% in May 2026, while nonfarm payrolls grew by 172,000 — well ahead of economists’ expectations. Gains came from leisure & hospitality, local government, and health care, while financial activities lost jobs. (BLS Employment Situation, May 2026)
- Long-term unemployment (27+ weeks) held at 2.0 million people in May, but is up 524,000 over the past year and now accounts for 27.5% of all unemployed Americans.
- 29% of small business owners reported job openings they could not fill in May — down 5 points from April and the lowest level since May 2020, per the NFIB’s latest Jobs Report. Fifty-five percent reported hiring or trying to hire, up 2 points from April. (NFIB Jobs Report, May 2026)
Star note: If you, too, are struggling with filling positions at your company, reach out to us. We’ve got incredible candidates within reach.
Hiring & Work Culture News:
- Entry-level work didn’t disappear — it just morphed into something young workers can’t get (Fortune). A new analysis finds that “entry-level” job postings increasingly demand skills that used to be reserved for mid-career workers — things like stakeholder management and judgment calls. Worth a read for any employer rethinking what “junior” actually means on a job description.
- Why some companies are rehiring employees they laid off due to AI (Fast Company). New research from Robert Half found that roughly a third of hiring managers say their company eliminated a role because of AI-driven efficiency gains, only to end up rehiring for that same role later. The piece dubs it the “AI boomerang effect.”
- New York Fed research is just one of many saying remote work is behind the real Gen Z hiring nightmare (Fortune). A growing body of research, including from the New York Fed, points to the shift toward remote and hybrid work as a key driver of weak hiring for new grads, since fewer in-person, lower-stakes entry-level roles exist for young workers to learn on the job.
More From the Team at Star Staffing:
Here are a few of the articles we published on hiring trends and California labor last month.
- 7 Ways to Support Mental Health in Your Workplace
- Why Making Safety a Top Priority is Beneficial to Your Company
- 3 Powerful Benefits of Using a Staffing Firm for Contingent Hiring
- How to Become a Must-Hire Bottling Line Worker
Northern California Unemployment Rates by County
*Note: Not seasonally adjusted.
Alameda County: 3.8%
Alameda, Oakland, Hayward, Berkeley, San Leandro, Livermore, Pleasanton, Dublin
Marin County: 3.4%
Larkspur, Mill Valley, Novato, San Rafael
Napa County: 3.6%
Napa, Yountville, St. Helena, Calistoga, American Canyon, Angwin
Sacramento County: 4.2%
Sacramento, Elk Grove, Rancho Cordova, Folsom, Citrus Heights, Fair Oaks
San Joaquin County: 5.6%
Stockton, Lodi, Tracy, Manteca, Ripon, Lathrop
Sonoma County: 3.7%
Sonoma, Santa Rosa, Petaluma, Healdsburg, Rohnert Park, Sebastopol, Windsor, Bodega Bay
Solano County: 4.3%
Fairfield, Vacaville, Vallejo, Benicia, Suisun City, Dixon, Rio Vista
Stanislaus County: 6.4%
Ceres, Modesto, Oakdale, Patterson, Riverbank, Salida, Turlock
Yolo County: 4.8%
Davis, West Sacramento, Woodland
Note: For Southern California unemployment rates, see edd.ca.gov.
California Labor Law/Policy Changes (2026)
Minimum Wage Increase
The state’s minimum hourly wage increased to $16.90/hour as of January 1, 2026 (up from $16.50/hour in 2025). This hourly increase also affects the minimum salary requirements for full-time exempt employees. As of January 1, 2026, the minimum salary for a full-time exempt employee is $70,304 per year. Read our full report here.
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Star Staffing is a woman-owned, award-winning recruiting and temp hiring firm with 6 branch locations throughout California.