California, including the Bay Area, lost thousands of jobs in March, adding to losses already reported for the first two months of 2025.

According to the U.S. Bureau of Labor Statistics, the Bay Area shed 5,800 jobs last month. The state, meanwhile, lost 11,600 jobs in March, the state Employment Development Department reported Friday.

“It’s getting harder to deny a recession is already underway here in the Bay Area,” said Scott Anderson, chief economist for BMO Capital Markets. “The tariff shock and financial market volatility are likely to tip the scales even further toward contraction and retrenchment in the months ahead. Now is a good time to batten down the hatches if you’re a Bay Area consumer or business owner.”

Job losses in the Bay Area included employment downturns in all three of the region’s biggest metro areas. The East Bay lost a net total of 1,200 jobs, the South Bay shed 1,900, and the San Francisco-San Mateo region chopped a net total of 2,100 jobs.

“The first quarter of 2025 ended with a thud for the Bay Area economy,” said Jeff Bellisario, executive director of the Bay Area Council Economic Forum.

The statewide unemployment rate improved slightly to 5.3% last month, compared with 5.4% in February, the EDD reported. The jobless rate is culled from a survey of households, while the nonfarm payroll job totals are gathered from a survey of employers. The Bay Area and California numbers were adjusted for seasonal volatility.“Our tech companies have been on an efficiency push for the past year or more and that had a dampening effect across the Santa Clara Valley,” said Russell Hancock, president of Joint Venture Silicon Valley. “Now you add in the whiplash effect of (President Donald) Trump’s tariffs, the threat of retaliation, and the general uncertainty that has created.”

While California has lost 54,800 jobs since the start of 2025, other states have added positions every month. The U.S. as a whole has added 456,000 jobs, or an average of 152,000 jobs a month, according to the federal labor agency.

“California is falling further behind the nation and other states in jobs added and the unemployment rate,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD. “California has seen its total payroll job numbers decline, even as other states and the nation overall gained jobs.”

Other data points have emerged that suggest California’s job market is even more frail than the current numbers indicate. For both January and February, the state EDD revised lower the initial estimate for job totals in California.

In January, the initial estimate reported that California’s job totals were unchanged, but the revision announced when the next report was produced disclosed that the state had actually lost 21,400 jobs.

In February, the state EDD estimated that California lost 7,500 jobs that month, but the latest revision in the report released Friday disclosed California had actually lost 21,800.

Statewide employment trends have tumbled into an ominous pattern, according to an assessment by Beacon Economics, which tracks economies.

Hiring in California during March was produced primarily by sectors that depend on serving a local population, according to Beacon.

“California’s current job growth is being led almost exclusively by the government and health care sectors,” said Justin Niakamal, research director with Beacon Economics.

Industries such as tech, manufacturing and wholesalers that produce goods and services for exports to other states or countries are in a slump.

“The state payroll job loss would have been greater if not for health care, which added 12,600 jobs,” Bernick said. “Once again, it is the health care sector that is keeping the California economy afloat.”

Export-oriented industries have staggered so far in 2025.

“There’s an export exodus in the state,” said Niakamal of Beacon. “Virtually every export sector in the state has fewer jobs now compared to last year, which is doubly concerning considering the tariff talk.”

Job markets in California have become weak enough that they have slipped below key benchmarks.

In December 2024, California reached an all-time high for payroll jobs, about 18.03 million. But the three straight months of job losses that followed have shoved the state below the 18 million mark to a March total of 17.98 million nonfarm payroll jobs.

The Bay Area’s string of job losses has left the region at slightly above 3.99 million nonfarm payroll jobs. That represents the first time the Bay Area has been below the 4 million jobs benchmark since February 2022, more than three years ago.

“This region thrives on risk-taking,” Bellisario said. “A relatively high interest rate environment, uncertainty around global trade, and a general lack of clarity around the future path of the economy have all pushed employers to hunker down.”