Weak CA job market likely to continue, researchers say

From CalMatters economy reporter Levi Sumagaysay:

California, whose unemployment rate has been at 5% and above for the past couple of years, is likely to see a weak job market through at least early next year, according to the winter UCLA Anderson forecast published this week. 

Authors of the longtime economic forecast cited continued uncertainty around tariffs, deportations and federal funding as factors.

Based on year-over-year data through August, the economists said weak or declining jobs growth affected construction, nondurable goods manufacturing, retail, and leisure and hospitality. Business services jobs, which include professionals in the tech industry, lawyers, accountants and architects, fell in the following major regions: Silicon Valley, San Joaquin Valley, Sacramento and the Delta, San Diego and the Inland Empire. 

The sectors that showed job growth in the past year — state and local government, education, health care and social services, and farms — could shrink in 2026 because of budget constraints, federal funding cuts or deportations, the economists said. 

Possible bright spots include aerospace and artificial intelligence. But “for the California economy to grow faster than the U.S. economy, as it is accustomed to doing, durable goods manufacturing, including aerospace and technology-laden sectors, will have to rebound strongly,” the economists wrote. They added that the state and nation have seen a decline in manufacturing jobs, and “the timing of a turnaround in this sector remains uncertain.”

Based on what happened after mass deportations from 2008 to 2014, the forecast’s authors said they expect continued deportations to have a negative effect on the California economy both in terms of decreased local consumption and a drop in other employment. That’s because jobs of immigrants lacking permanent legal status and those of U.S.-born workers can be complementary. 

“For example, home building could be delayed because of a reduction in skilled roofers,” the economists wrote.

Californians who witness potentially unlawful conduct by federal agents can report what they saw to the state via a new online portal unveiled Wednesday.

As President Donald Trump’s administration continues its crackdown on immigrants — at times deploying plain-clothes, masked federal immigration enforcement agents — California Attorney General Rob Bonta is urging residents to report “excessive force, unnecessary detentions and unconstitutional searches.”

• Bonta, at a press conference: “Over the last 10 months we’ve seen troubling reports coming from communities across California, including unmarked, military-style vehicles and individuals detained in ways that resemble abductions and kidnappings more than lawful arrests. Californians are scared and they’re right to question whether federal agents are respecting the law.” 

Bonta added that while reporting an incident helps the state “monitor and address” potential misconduct, it will not prompt any particular or immediate response from state authorities. 

More on CA and Trump: On Tuesday Bonta said that California, along with 21 other states, secured a preliminary injunction to block the Trump administration from refusing Medicaid reimbursements to Planned Parenthood.

In the ruling, the federal judge sided with the states’ arguments that Trump’s policy change was an unconstitutional “retroactive condition that … could not have anticipated when (states) joined Medicaid,” and that the costs to states to comply with the policy “constitute an irreparable harm.” The ruling provided the Trump administration seven days to file and appeal.

California, Santa Clara County and the city of San Francisco are suing the Trump administration over policy changes it issued last month, which shifts federal homelessness funds in a way that decreases money for permanent housing, writes CalMatters’ Marisa Kendall.

The lawsuits argue that the U.S. Department of Housing and Urban Development illegally bypassed Congress’ authority when it enacted new rules prohibiting jurisdictions that are applying for a piece of a $4-billion federal homelessness fund from spending more than 30% of their grant on permanent housing.

Most experts agree that permanent housing is one of the most effective ways to solve homelessness. Last year, California communities won more than $683 million in federal homelessness funds, 90% of which went toward permanent housing projects. Those projects currently house tens of thousands of people, who may become homeless again due to the rule change, according to Gov. Gavin Newsom’s office. 

HUD Secretary Scott Turner in a statement last month said the changes are aimed at “stopping the Biden-era slush fund that fueled the homelessness crisis … and incentivized never-ending government dependency.” 

This is the 47th lawsuit California filed against the second Trump administration.

Read more here.