CA’s weak labor market is likely to continue, researchers say

From CalMatters economics reporter Levi Sumagasai:

California, which has had an unemployment rate of 5% or more for the past several years, is likely to experience a weak labor market at least until early next year, according to Winter UCLA Anderson’s prediction published this week.

The authors of the long-term economic forecast pointed to continued uncertainty over tariffs, deportations and federal funding as factors.

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

Sectors that showed job growth last year — state and local government, education, health and social services and farms — could shrink in 2026 due to budget constraints, federal funding cuts or deportations, economists said.

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

Based on what happened after mass deportations from 2008 to 2014, the forecasters said they expect continued deportations to have a negative effect on California’s economy in terms of both reduced domestic consumption and declines in other employment. That’s because the jobs of immigrants without permanent legal status and those of U.S.-born workers can complement each other.

“For example, housing construction may slow due to a reduction in qualified roofers,” the economists wrote.

Californians who witness potentially illegal behavior by federal agents can report what they saw to the state through a new online portal presented on Wednesday.

As President Donald Trump’s administration continues its crackdown on immigrants — sometimes deploying civilian, undercover federal immigration officers — California Attorney General Rob Bonta is urging residents to report “excessive force, unnecessary detentions and unconstitutional searches.”

• Bontaat a news conference: “Over the past 10 months, we’ve seen disturbing reports coming from communities across California, including unmarked military-style vehicles and individuals being detained in ways that look more like kidnappings and abductions than lawful arrests. Californians are scared and right to question whether federal agents are following the law.”

Bonta added that while reporting an incident helps the state “monitor and address” potential misconduct, it will not result in a specific or immediate response from state authorities.

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

In the ruling, the federal judge sided with the states’ arguments that Trump’s policy change was an unconstitutional “retroactive provision that … could not have been foreseen when (states) joined Medicaid,” and that the costs to states of complying with the policy “constitute irreparable harm.” The ruling gave 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 issued last month that redirect federal homelessness funds in a way that reduces money for permanent housingwrites Marissa Kendall of CalMatters.

The lawsuits allege the U.S. Department of Housing and Urban Development illegally circumvented congressional authority when it adopted new rules barring jurisdictions applying for part of a $4 billion federal homeless fund from spending more than 30 percent of their grant money on permanent housing.

Most experts agree that permanent housing is one of the most effective ways to address homelessness. Last year, California communities won more than $683 million in federal homeless funds, 90 percent of which went to permanent housing projects. Tens of thousands of people currently live in those projects, who could become homeless again because of the rule change, according to Governor Gavin Newsom’s office.

HUD Secretary Scott Turner said in a statement last month that the changes are aimed at “ending the Biden-era slush fund that has fueled the homelessness crisis … and fueled endless dependence on government.”

That’s it 47th case filed in California against the second Trump administration.

Read more here.