The good news: California's unemployment rate has fallen from 10.7% in May 2012 to 8.6% a year later.
The bad news: The improving economy means that the Department of Labor on Friday may nix the last tier in federal unemployment extension benefits -- the last safety net for the long-term unemployed.
State officials said Tuesday that it expects the federal government to scale back unemployment benefits if Friday's job report shows further improvement in the state's labor market.
The cut is automatically triggered if California's jobless rate dips below a three-month average of 9%.
About 100,000 Californians are expected to be affected if Tier 4 unemployment benefits, which provide up to 10 weeks of benefits, are eliminated.
"While we await final word on the state's latest unemployment rate, the trend in declining unemployment indicates we will lose our ability to offer Tier 4 extension benefits," said Sharon Hilliard, chief deputy for the state's Employment Development Department. "We want to make sure that our customers have as much warning as possible about reduced benefits so they can plan their finances accordingly."
If the Labor Department issues its decision as expected, the move would affect those who file for unemployment on Aug. 11 or later, according to a spokesman.
The warning of further cuts follows reductions in federal unemployment benefits that began in April. They were caused by federal budget cuts, known as sequestration.
The sequester reduced benefit checks by an average of $52, according to state officials.
Currently, about 750,000 people are receiving unemployment benefits in California. Almost half of those are collecting federal unemployment benefits after exhausting 26 weeks of benefits paid out by the state.
Federal extension benefits are set to expire at the end of this year, state officials also warned. The federal benefits were made available during the depths of the recession.