California's jobless rate dropped back to 6.3 percent in June after seeing a slight increase in May, the state Employment Development Department reported Friday.
The state added 22,900 nonfarm payroll jobs in June, helping unemployment return to April levels after creeping up to 6.4 percent.
The rate drop occurred even as the number of people entering the workforce grew.
"It shows both growth in the labor force and people finding work," department spokesman Kevin Callori said.
A year ago, California's jobless rate was 7.5 percent.
With the exception of May, the state's unemployment rate has steadily dropped since February 2010.
The employment department said May's rise in unemployment was due to an influx of people entering California's workforce ahead of the summer employment season. The state still reported adding a revised 46,200 jobs that month.
The numbers are based on federal and state surveys of employers and households, but don't take into account people who have stopped looking for work or those who are working part-time but would rather be working full-time.
California's unemployment rate remains higher than the national average. The U.S. unemployment dropped to 5.3 percent in June, the lowest it's been since April 2008.
Callori says California's rate represents a more positive picture, however. Though the national unemployment rate shows a drop, this is only because there was a small decrease in both the labor force and in employment.
More than 1.1 million people remain unemployed in California, though the number is down by 18,000 in the month and by 217,000 in the past year. Over 360,000 people received regular unemployment insurance benefits in June.
Six sectors grew in June, including manufacturing; trade, transportation and utilities; financial activities; professional and business services; educational and health services.
Professional and business services led the growth, posting 12,700 jobs.
Five sectors reported monthly declines, including mining and logging; construction; information; leisure and hospitality; and government. Leisure and hospitality posted the largest monthly drop, down 5,800 jobs.
This story has been updated.