The July California jobs report shows continued weakness for the Golden State’s labor markets. Annualized month-on-month job growth declined 0.8 percent. Year-on-year job growth also declined 0.8 percent, and the unemployment rate held at 12.3 percent. The unemployment rate remains almost 300 basis points higher than the United States unemployment rate.

To some extent, as with the United States economy, the state’s jobs are cooling as temporary Census workers are returned back to the unemployed labor force. That is the Federal component of California public sector jobs. The state and local categories are likely to be weak for at least a year as municipal governments deal with meager tax receipts and balanced budget requirements.

The construction job sector, which was hit so hard in this recession, was up on the month, but down on the year. Construction job gains that were due to the American Recovery and Reinvestment Act will be offset by ongoing weakness in housing. Housing will be even weaker than usual in the next couple of months as the market comes back to reality now that the first-time home-buyer program is over.

We expect that the August California jobs report will be qualitatively similar to the July report. It is due out September 17.