California’s unemployment rate dropped to 5.8 percent in January, from 6 percent in the previous month, as the state added 20,000 non-farm payroll jobs.

The biggest gains where made in the leisure and hospitality industry, where employers created 14,800 new positions last month, for a total of 40,800 since January 2004, according to figures release today by the state Employment Development Department.

“It certainly looks encouraging and it looks fairly strong,” said Suzanne Schroeder, an EDD spokeswoman.

In a separate survey of households, 16.6 million Californians held jobs last month, an increase of 11,000 from December and 272,000 from January 2004. Workers who are self-employed and in the agricultural industry are not included in this data.

At the same time, the number of unemployed dropped by 35,000 in January.

Whether last month’s job increases is a sign that the state’s economy is on a long-term upward swing remains to be seen. Some 22,800 jobs were added in last November, only to see the December holiday season shed 10,900 positions.

“The number of jobs we (had) in December was not as much as we would have seasonally expected it to be,” said Schroeder. “It’s been a little volatile lately.”