California’s unemployment picture worsens, still the nation’s highest state jobless rate

Not only is California’s unemployment rate again the nation’s highest among the 50 states, the number of unemployed workers in the state was up for the sixth straight month.

The September rate, the latest data available, was 5.6%, according to the California Employment Development Department. The national rate was 4.4%.

In second place was Nevada, at 5.3%, followed by New Jersey at 5%. Eighteen states and Washington, D.C., had rates above the national average, according to new data from the federal Bureau of Labor Statistics. South Dakota’s rate was the lowest, at 2%.

That gap between California and other high unemployment states is growing, and independent forecasts predict the 5.6% rate could go as high as 5.9% early in 2026, according to this month’s UCLA Anderson forecast.

It saw an “employment recession” in the state.

Why unemployment remains up

Part of the reason is that California “has a disproportionate number of workers compared to other states” in entertainment and technology, said Michael Bernick, former state EDD director and now an employment attorney.

The entertainment industry, he said, “has seen tens of thousands of job losses in the past few years due to reductions in demand by studios and networks, production going to lower-cost states and countries, and AI.” Tech companies have seen layoffs recently.

Bernick saw an underlying reason for the sluggish job numbers—”the costs and liabilities of hiring in California—costs and especially liabilities that are higher than other states.”

Overall, California lost 4,500 payroll jobs in September.

This story was originally published December 12, 2025 at 10:22 AM with the headline "California’s unemployment picture worsens, still the nation’s highest state jobless rate."

David Lightman

McClatchy DC

David Lightman is a former journalist for the DCBureau