California Governor Gavin Newsom touted the state’s job growth in his State of the State Address last week, but a new report from a state agency found the state’s private sector employment has been collapsing since 2022, with public sector hiring accounting for the entire state net increase in jobs.

California’s state-funded, non-partisan Legislative Analyst’s Office found the private sector lost 154,000 jobs and the public and public-supported sector has gained 361,000 jobs since the peak of the state’s labor market in September 2022. This means on net, the state’s 207,000 job increase in employment since September 2022 has been from growing government-related hiring.

Last week Newsom took to the podium to tout California’s job creation, saying, “California is the tentpole of the American economy – 16% of all national job creation last month came right here in California.”

With California’s net growth coming from government hiring in spite of private sector decline, Republicans jumped to say “I told you so.”

“Republicans have been saying for years that businesses and Californians are leaving. It was just a matter of time before the slick numbers game the governor and legislative Democrats play would come to light,” said State Sen. Brian Dahle, R-Bieber, to The Center Square. “You’re only going to see it get worse if the unchecked legislative branch continues to write their own laws and create more subsidized programs.”

Newsom and legislators worked together to pass a budget that cuts or defers $47 billion in spending this year. Given the state’s reliance on government spending for jobs and economic growth, and the LAO’s sounding of the Sahm Recession Indicator after the state’s unemployment rate rose from 3.8% in 2022 to 5.2% today, spending cuts could bring the state’s jobs growth to an end.