"Now we have to wait to see what kind of momentum it starts gaining in an economic recovery," said Loree Levy, spokesperson for the California Employment Development Dept.
The momentum appears to be there. In each of the first four months of this year, the state has gained an average of 14,100 jobs.
While that may seem small, compare that to the same period last year, when California lost an average of 106,000 jobs a month.
Though the signs are encouraging, unemployment remains high at 12.6 percent, because discouraged workers who quit looking for a job a while back have begun applying again.
Regina Vasquez recently restarted her job search and is still frustrated.
"Well, they're saying there are more jobs, but I don't see any difference," said Vasquez.
Still unclear is how the public sector will affect unemployment numbers in the coming months.
Just a week ago, Governor Schwarzenegger proposed eliminating or paring back numerous social services that employ thousands.
Democratic leaders say the state should postpone more than $2 billion in corporate tax breaks.
"Better to delay corporate tax breaks for a couple of years, at least until times get better than to completely decimate the public sector," said state Sen. Darrell Steinberg (D-Sacramento).
But Schwarzenegger argues corporate tax breaks and other incentives help create private sector jobs.
"This is about specific tax credits to help them grow, help them buy more equipment, therefore hire, create jobs. When you do that you have more people paying taxes and more money to pay for those programs that we don't want to make cuts to," said Aaron McLear, press secretary to the governor.