The state lost 39,300 payroll jobs during September - a disappointing result after a relatively miniscule 7,200 jobs disappeared in August. Many economists say the payroll numbers are more reliable indicators than the unemployment rate, which is based on a smaller survey.
Sacramento's unemployment rate fell to 11.8 percent in September, down two-tenths of a point.
The region added 200 jobs during the month.
The job market got a boost when school started. Some 3,900 jobs were added at area school districts.
Howard Roth, chief economist at the state Department of Finance, called the report "mixed." Job losses are still lower than earlier this year - when 60,000 or more jobs were disappearing per month - but "apparently they're not moderating as much as I thought," he said.
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"This is certainly the month that government job losses came home in the numbers," he said.
At the EDD job-center office on Broadway in Sacramento, unemployed bookkeeper Marlena Turner was stunned to hear that the unemployment rate had fallen.
"It seems like every time you turn around, people are getting laid off," said Turner, 62, who lost her job in February.