Bay Area and California both lost jobs in June, new report shows

Both the Bay Area and California lost thousands of jobs in June, marking two straight months of job losses, the state Employment Development Department reported Friday.

Adjusted for seasonal volatility, the Bay Area lost 3,800 jobs last month, while California shed 2,900, the EDD reported.

“We’re in a period of slow growth or no growth, and even shrinking,” said Russell Hancock, president of Joint Venture Silicon Valley, a San Jose-based think tank.

In June, the South Bay lost 3,300 jobs and the East Bay shed 1,900 positions. The primary bright spot was the San Francisco-San Mateo region, which added 1,500 jobs.

In the North Bay, Sonoma County gained 200 jobs, Napa County’s job totals were unchanged, Marin County shed 100 positions, and Solano County lost 200, the EDD reported.

“It’s getting harder to sense a strong pulse in the Bay Area and California labor markets,” said Scott Anderson, chief U.S. economist with BMO Capital Markets. “Two consecutive months of net job losses have hit the Bay Area now, tempering encouraging signs of recovery earlier this year.”

California’s strongest region for hiring was Los Angeles County, which added 2,300 jobs in June, EDD figures show.

The state has now lost jobs for two consecutive months and has shed employment for three of the last five months, according to the EDD reports. California lost 15,600 jobs in May following a downward revision in job totals for that month.

“California would have shown a greater job loss except for the gains in health services and private schools and education,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.

Healthcare jobs provided the primary sources of employment strength in California in June, a pattern that began to emerge in 2022, according to Bernick.

“For California as a whole, continued strong job gains in health services can no longer mask net job losses coming from most other sectors of the economy,” Anderson said. “Notable California net job losses occurred in government, construction, trade and transportation, and professional and business services sectors.”

Unemployment in California was 5.2% in June, an improvement from the 5.3% jobless level in May, the EDD reported. Unemployment has improved steadily in recent months after peaking at 5.5% during the latter stages of 2025.

The improvement in unemployment, however, has coincided with the steady declines in the labor pool in California. California’s vanishing labor force has created statistical quirks that helped produce an improved jobless rate statewide.

California’s labor force shrank by 48,700 workers in June compared with May and by 199,000 workers over the past 12 months.

Longer-term patterns in Bay Area hiring appear to be more positive than what occurred in June.

Over the one-year period that ended in June, job totals rose by 1.4% in the South Bay, 1.2% in the San Francisco-San Mateo area and 0.8% in the Bay Area overall. Hiring activity in the three areas outpaced the 0.6% increase in job levels in California during the same 12 months.

The South Bay added 16,400 jobs, and the San Francisco-San Mateo metro gained 13,200 positions, but the East Bay lost 100 jobs during the one-year period ending in June, seasonally adjusted figures show. The Bay Area added 33,400 jobs over the 12 months.

Steve Levy, director of the Palo Alto-based Center for the Continuing Study of the California Economy, was encouraged by the longer-term trends, but he also sees perils for the Bay Area job market beyond the losses in June.

“The year-over-year job gains were good, but there are two strong cautions,” Levy said. “First, the job gains occurred in late 2025.”

During the final six months of 2025, the Bay Area added 25,000 jobs. However, over the first six months of this year, the Bay Area gained just 8,400 positions.

“Second and more troubling is that the labor force is declining as a result of administration policies,” Levy said.

The U.S. Homeland Security Department reported that its enforcement operations caused 605,000 deportations nationwide and that 1.9 million people self-deported in 2025.

Artificial intelligence-related hiring could provide a boost for the Bay Area job market, but those gains won’t take hold right away, in Levy’s view.

“AI and data center activities can provide positives in the future, but the next six months look difficult with gas prices and inflation rising and the Iran conflict unresolved,” Levy said.

Help-wanted signs might remain relatively scarce for a while while employers survey a murky economic landscape, Bernick warned.

“Employers are more cautious than ever, due to a mix of the general economic uncertainty linked to geopolitical events and uncertainty about the impacts of artificial intelligence,” Bernick said.