California employers added an estimated 39,400 nonfarm payroll jobs in August, but a separate measure showed fewer state residents working or looking for work. Payroll employment rose to 18.177 million, while the civilian labor force contracted by about 50,500 people. The unemployment rate held at 5.1%. That split is central to interpreting the report.

The payroll gain was concentrated in a few large sectors. Education and health services added about 18,600 jobs from July, government gained 9,800, leisure and hospitality added 7,800, and trade, transportation and utilities increased by 6,900. Manufacturing added about 800 jobs. These figures are seasonally adjusted estimates intended to separate underlying movement from normal calendar patterns.

Several industries remained soft. Professional and business services lost about 1,800 jobs during the month, financial activities declined by 700 and construction fell by 600. California information employment also remained well below its year-earlier level, with the Bureau of Labor Statistics' state profile showing a 4.2% annual decline in that sector.

The year-over-year payroll picture was positive overall. California had about 138,500 more payroll jobs than in August 2025, an increase of roughly 0.8%. Education and health services accounted for most of that gain, adding about 131,500 positions. Leisure and hospitality and trade also grew, while manufacturing, construction, financial activities and professional services were below their levels from a year earlier.

The resident survey tells a more cautious story. California's labor force fell to 19.499 million in August, down from 19.550 million in July and 19.850 million a year earlier. Resident employment declined by about 36,500 during the month, while the number of unemployed residents fell by roughly 14,000. Because both employment and unemployment declined, the jobless rate remained at 5.1% rather than signaling a broad improvement.

The difference between the two measures is important. The household survey classifies people by where they live; the establishment survey counts jobs where employers are located. A person may hold more than one payroll job, and workers who commute across state lines can appear differently in the two systems. Sampling variability and later revisions can also produce short-term divergence.

Nationally, the unemployment rate was 4.1% in August, unchanged from July. California's 5.1% rate remained above that benchmark, even as the state posted a strong numerical payroll increase. The combination suggests employers expanded payrolls in August without reversing the longer contraction in the number of residents participating in the labor market.

All August state estimates are preliminary. BLS says payroll figures after the current benchmark will be revised as new information becomes available. The next report will test whether California's health, hospitality and government gains continue and whether the labor force stabilizes after five consecutive monthly declines shown in the current series.