The rate of unemployment in California dipped slightly from a revised 12.3 per cent in August to 12.2 per cent in September, however recession’s grip is still firm as California employers axed 39,300 jobs during last month.

California’s rate of joblessness in September was much higher than 7.8 per cent in September last year.

It was also higher than the national rate of unemployment, which is standing at 9.8 per cent.

California has been facing sharp decline in consumer spending due to tight economy and collapse of home mortgage booms since the start of recession.

Economist Stephen Levy said, “We are disproportionately hit in the government sector because our state and local governments are having worse budget shortfalls than in other states.”

Government payrolls contracted by 12,700.

Stephen Levy further added that local government and education job losses hit California hard last month.

As per estimates by the employment department, around 600,000 people have been without work for over six-month period.