If I had written, as Donald Trump was being inaugurated for his second presidential term in January 2025, that California would have the nation’s best job market in the following year, you might have questioned my sanity.
Trump’s “America First” economic policies – including trade-choking tariffs and a harsh immigration crackdown – don’t seem to be a good mix with California’s globally oriented business climate. This new administration’s philosophy only adds to the numerous challenges California employers face on a day-to-day basis.
But ponder the surprising results my trusty spreadsheet found when reviewing a new Bureau of Labor Statistics report on state-level job markets for January 2026 – 12 months after Trump’s second term began.
As a reminder, consider the Golden State’s paycheck-creating heft. California’s 18.2 million jobs in January were No. 1 among states, accounting for 11% of the nation’s 159 million jobs. Next comes Texas at 14.4 million, New York and Florida at 10 million and Pennsylvania at 6.2 million.
By this math – seasonally adjusted, by the way – California bosses added 93,500 jobs in January over December. That’s No. 1 among the states and 26% of the nation’s combined 356,800 job additions. Next was Texas at 40,100, New York at 23,800, Florida at 21,400 and Illinois at 18,000.
Six states lost jobs for the month. That’s a modest number, given that the average month has seen 16 states with job losses since 1990.
January’s largest declines were in the District of Columbia, down 5,400; Idaho, down 2,400; Mississippi, down 800; South Dakota, down 700; and Wyoming, down 300.
Percentage points
But even considering California’s vast job market, the state’s employment picture looked impressive on a percentage basis.
January’s 0.5% growth for California was No. 1 among the states. That’s only the third month since 1990 that California had the nation’s fastest job-growth pace – July 1999 and April 2016 were the others.
Additionally, the Golden State’s January bump was more than double the nation’s 0.2% growth.
Next was North Dakota, up 0.47%, and Iowa, Hawaii and New Hampshire, up 0.4%. Worst? District of Columbia, off 0.7%; Idaho, off 0.3%; and South Dakota, Wyoming and Mississippi, down 0.1%.
A longer view
Next, ponder the 12 months since Inauguration Day.
California added 131,200 jobs in the year that ended in January, also No. 1 among the states, accounting for 39% of the nation’s 340,700. Next was Texas at 112,200, New York at 45,300, North Carolina at 41,900 and Pennsylvania at 35,500.
Somewhat distressing at the national level were the 24 states that experienced job market dips over the past year. Since 1990, an average month has had 10 states with a year’s worth of decreased employment,
January’s biggest 12-month losses were in Maryland, down 49,300; D.C., down 45,300; Florida, down 20,600; Virginia, down 19,800; and Oregon, down 18,600. Trump’s slashing of federal jobs was clearly part of the declines in Maryland, D.C. and Virginia.
California’s 0.7% growth rate for the year ranked ninth-highest among the states. Since 1990, California has ranked worse 79% of the time.
Contemplate that the Golden State’s one-year upswing was also more than quadruple the nation’s 0.2% job-creation pace.
No. 1 was Nevada, up 1.9%, then South Carolina at 1.3%, Missouri and Arkansas at 0.9% and North Carolina at 0.8%.
Largest declines? D.C., off 5.9%; Maryland, off 1.7%; Iowa, off 1%; Oregon, off 0.9%; and New Hampshire, off 0.7%.
The big picture
Let’s take January results as a curious window into the state of the economy in early 2026.
For starters, California businesses tend to be entrepreneurial and resilient. Enterprises that can survive the many hurdles the state government produces may find national business upheaval just part of the routine.
Also, the early days of the artificial intelligence revolution appear to be positive for California’s overall job market. Technology companies, a California specialty, are staffing up for this latest wave of innovation.
You can’t ignore, however, the workplace efficiencies created by AI tools. Those cost savings are tied to recent layoffs in the state and across the nation. AI-linked job cuts are expected to grow in the coming years.
Plus Trump’s policies include heavy defense spending. That could also be a boost for the many companies across California that create weapons and science for battle.
Yes, this paints a best-case scenario based on January’s results.
Conversely, we’ll note that hiring’s momentum is suspect. For all of 2025, California lost 11,200 jobs – the fifth-worst performance among the states.
And job counts are notoriously volatile, so one good month like January isn’t any trend.
Still, California workers should try to enjoy the moment. Because when California has a bad month, economically speaking, many observers are quick to point that out.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com.
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