Job Market Cools

America’s unemployment rate declined slightly to 4.2% in June, but the latest figures reveal a labor market that is becoming slower and less predictable—especially in California and the Coachella Valley.

Approximately 7.1 million Americans were officially unemployed during the month. Employers added 57,000 jobs nationwide, a relatively modest increase, while previously reported gains for April and May were revised downward by a combined 74,000 jobs.

California’s unemployment rate fell to 5.2%, its lowest level since May 2024. That was an improvement from 5.5% one year earlier, but it remained a full percentage point above the national rate. California was also tied with Connecticut, Oregon and Washington for the highest unemployment rate among the states. Only the District of Columbia, which is not a state, posted a higher rate at 6%.

The state’s job picture was mixed. California lost 2,900 payroll positions in June after revised figures showed a loss of 15,600 jobs in May. Private education, healthcare and social assistance continued to add workers, but several other industries remained nearly flat or declined.

A falling unemployment rate alongside job losses may sound contradictory. That happens because the figures come from two different surveys. One measures the number of people working or actively looking for work, while the other counts jobs reported by employers. The unemployment rate can also fall when people retire, stop searching or otherwise leave the labor force.

In the Riverside-San Bernardino region, which includes the Coachella Valley, the unadjusted unemployment rate rose from 4.6% in May to 5.3% in June. However, it remained below the 5.7% recorded in June 2025.

The monthly increase should be viewed in the context of the desert’s seasonal economy. As winter visitors leave and extreme summer temperatures arrive, hotels, restaurants, attractions and other tourism-related businesses often reduce hours and staffing. Nationwide, leisure and hospitality employment declined by 61,000 jobs in June, making that weakness particularly relevant locally.

The official unemployment rate also does not include everyone who wants more work. People who stopped looking are generally not counted as unemployed, while someone working only a few hours a week is still classified as employed. A broader federal measure—including discouraged workers and people forced to accept part-time work—stood at 7.9%.

The overall message is not that the economy has entered a jobs crisis. Instead, hiring has cooled, job opportunities are becoming less plentiful, and workers may need longer to find suitable employment.

For the Coachella Valley, healthcare, education, social services and professional occupations may provide greater stability through the summer. Tourism employment should begin strengthening again as businesses prepare for the fall and winter visitor season.