California's unemployment rate fell to 10.2% in September from 10.6% in August, but just 8,500 net new jobs were created, according to the U.S. Department of Labor. 

The national unemployment rate in September was 7.8%, its lowest level in 3 1/2 years.

But  the Golden State's unemployment fell significantly from August a year ago when the rate was 11.7%. A total of 262,000 net new jobs were posted for the past 12 months, according to a survey of businesses.

California had the third-highest unemployment rate in the nation in September at 10.2%, behind Nevada at 11.8% and Rhode Island at 10.5%. (MORE)