California's Employment Development Department announced on Friday that unemployment held steady in June at 4.2%.  That's the good news.  The astonishing news is that the largest state in the union created a net gain of only 800 jobs.

L.A. Times:

The June numbers represent a pullback from May, when the Golden State added 7,200 jobs.  And the gains in May were much smaller than April, when employers boosted payrolls by nearly 26,000.

The slowdown could signal that California is simply reaching full employment.  Employers are struggling to find workers.  Or it could be a sign of sagging confidence among executives.  A growing trade war with China, for example, has unnerved companies in California's logistics industry and beyond.

Economists, however, cautioned against reading too much into one or two months of data.

Lynn Reaser, chief economist of the Fermanian Business and Economic Institute at Point Loma Nazarene University, said June's disappointing figures "warrant attention" and could be a sign of uncertainty around trade.  But they are not cause for "undue alarm at this point."

"June's weak performance could be temporary," she said in an email.

Others said it was too early to see effects from the tariffs the Trump administration has placed on Chinese goods.  An initial levy on $34 billion of Chinese goods, along with countermeasures by China, took effect in July following months of tariff threats and saber-rattling between the world's two largest economies.  More tariffs have been threatened.

Michael Bernick, an attorney with Duane Morris and a former director of the Employment Development Department, said the slowdown was expected after a sustained stretch of job growth, noting that the current economic expansion is now the second longest in the post-World War II period.

California recently passed Great Britain to become the world's fifth largest economy.  The U.S. is in the midst of an extraordinary economic boom fueled by tax cuts and deregulation.  One eighth of the population of the U.S. lives in California.

And the state could manage a net gain of only 800 jobs?

Yes, all the caveats mentioned above should be considered (the idea of "full employment" is a dubious one).  But it's hard to escape the fact that the state is losing as many jobs as it creates – a sign that all is not well economically in California.

Every aspect of business in the state is heavily regulated.  The paperwork burden alone is staggering.  It's no wonder that businesses are fleeing the state and those that remain are being cautious about expanding.