California’s Weak Labor Market

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Governing has looked beneath the surface of California’s economy and has found some sobering statistics. While it ranks as one of the largest economies in the world in terms of GDP, California’s labor market is among the weakest in the US. The state’s rate of job growth ranked 37th in 2025, and its December unemployment rate of 5.5% was the highest in the country. Economists point to the Bay Area as a principal source of weakness, as the region lost 20,000 jobs in 2025.

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