California sees a big drop in unemployment rate to 10.2 percent

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A job seeker looks over event materials as she waits to enter the San Francisco Hirevent job fair.

California's unemployment rate dropped to 10.2 percent in September, according the Labor Department. That's a big dip — the August rate was 10.6 percent and had been falling relatively slowly.

With the state now in striking distance of single-digit unemployment for the first time in years, it is clear that the recovery is gaining steam here. California has added 262,000 jobs since the beginning of the year, second only to Texas, which has added 700 more (it's neck and neck). 

Overall, the news is good for California and its nearly $2-trillion economy, the largest in the U.S.

A housing recovery is taking shape, with a "boomlet" at the lower end of the market creating bidding wars for entry-level homes. This is spurring builders to start building again, to capitalize on surging demand in a market that doesn't have enough supply. That's a big plus for unemployed construction and building trades workers.

But there are some headwinds. As Google and its weak third-quarter earnings Thursday demonstrated — along with Apple and its lackluster stock market performance since the iPhone 5 introduction — the tech sector, which has been taking the lead in hiring, is hardly a sure thing. 

The plunge in the state's unemployment rate for September also indicates that real hiring is going on, as opposed to unemployed workers simply leaving the labor force.

California still has the third-highest unemployment rate in the nation, behind Nevada and Rhode Island. But the state is proving that once it gets moving in the right direction, it can make significant progress in a big hurry.

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