Newsom’s Dilemma: Unemployment Spikes In California as Presidential Ambitions Soar

Jobless rate hits 5.4%, tying for highest in the nation, while the governor chases his inevitable presidential run.

🕒 3 min read

Is California The Model For Selling Oneself To The Nation?

Here we go again. Governor Gavin Newsom cannot resist the siren call of national politics. Between his very public feuds with President Trump and his recent trip to South Carolina (surely just a coincidence), one has to wonder who exactly is minding the store back home. Based on California’s latest economic data, the answer appears to be nobody.

According to federal statistics and analysis from the Center for Jobs and the Economy, the state’s unemployment rate rose to 5.4% in June. That ties California with Nevada for the dubious honor of having the worst unemployment rate in America. Even more troubling, this marks eighteen straight months without work for more than one million Californians, numbers we have not witnessed since the darkest days of the pandemic in 2021.

Big Problems: The Numbers Don’t Lie

The California Employment Development Department reports that the state lost 6,100 non-farm jobs in June alone. This represents the fourth month of job losses so far in 2025. Making matters worse, officials had to revise May’s employment gains downward from 17,700 to 11,700 new positions.

Private industry continues to hemorrhage jobs. Manufacturing shed 6,400 positions, the information sector (dominated by tech companies) lost 6,100 jobs, and professional, scientific, and technical services dropped 3,200 workers. The only bright spots came from government employment and healthcare, which together added 11,200 positions. Yet these taxpayer-funded jobs, while temporarily boosting headline numbers, ultimately drain resources from productive private enterprise and worsen California’s precarious fiscal situation. When you tally up all the damage, private industries lost 17,300 jobs. The San Francisco Chronicle reports that San Francisco and San Mateo counties’ unemployment rate climbed to 4.2%, with the number of people actively seeking work surging by 17.7%.

California ranks a dismal 35th among all states when measuring non-farm job growth compared to pre-pandemic levels. The state only recently exceeded its February 2020 employment numbers, but it took a sluggish 64 months to get there. States like North Carolina and Georgia accomplished the same recovery much faster, despite having smaller economies.

Chart Source: Center for Jobs and the Economy

Tech’s Troubles and Policy Pitfalls

The Bay Area, long the crown jewel of California’s economic engine, is in serious trouble. Major tech companies, including Scale AI, Microsoft, and Intel, have announced significant layoffs. Economist Christopher Thornberg in talking with the San Francisco Chronicle attributes this to an “ongoing contraction in the tech space” driven by artificial intelligence innovations reshaping the industry.

Yet market forces tell only part of this story. Michael Bernick, who previously ran the state Employment Development Department, in talking to the Chronicle, points directly to California’s high cost of living and burdensome employment regulations that make hiring workers more expensive than competing states. These policies often receive enthusiastic support from the Newsom administration, creating a vicious cycle that punishes businesses struggling with economic headwinds.

The unemployment crisis extends far beyond Silicon Valley. Five California counties now suffer double-digit unemployment rates, with Imperial County reaching an astronomical 18.9%. The Central Valley and inland regions face severe challenges, while even wealthy areas like San Mateo County have increased joblessness. This paints the picture of a state-wide policy failure rather than isolated economic troubles.

Chart Source: Center for Jobs and the Economy

Newsom’s National Dreams Meet California’s Reality

The governor seems more interested in building his progressive brand for an inevitable White House run than addressing the mounting problems in his backyard. Those South Carolina visits, as reported by Breitbart News, are not exactly subtle. Meanwhile, California faces a perfect storm of challenges: raging wildfires, gas prices averaging $4.50 per gallon that remain among the highest in the nation, and persistent urban problems plaguing cities like Los Angeles and San Francisco, not to mention the recent Los Angeles protests.

Now add a 5.4% unemployment rate that ranks among the worst in America to this growing list of troubles. States like Ohio, Illinois, and Georgia are leaving California in the dust regarding job creation. California’s labor force participation rate is just 62.4%, barely above the national average despite the state’s supposed advantages.

The contrast could not be more stark. While Newsom trades insults with Trump on social media and jets around the country testing presidential waters, the state he was elected to govern continues its slide toward mediocrity.

So, Does It Matter?

Any serious presidential campaign built on California’s supposed success story faces a fundamental credibility problem. How do you convince nationwide voters that you can manage their economy when your state struggles to create jobs? The unemployment numbers alone should give pause, but add in the wildfires, astronomical gas prices averaging $4.50 per gallon, the massive homelessness problem, and ongoing urban decay, and the narrative becomes even more problematic.

California voters deserve leadership that focuses on solving problems at home rather than chasing national headlines. Suppose Newsom cannot turn around his state’s economic trajectory soon. In that case, he may find that his presidential ambitions collide with an inconvenient truth: results matter more than rhetoric, and California’s results are not looking particularly impressive these days.