California’s economy remains stagnant. Nonfarm job growth turned negative in July following negligible gains in June. Home building slowed in June, although it remains well above last year’s pace. Commercial construction continued to lag behind 2002.
Industry employment fell by 21,800 in July. Monthly job losses have averaged 4,700 so far in 2003. Meanwhile, the nation lost 44,000 jobs in July. From July 2002 to July 2003, California nonfarm employment fell by 22,800.
Three major industry sectors added jobs in the state in July. Information, spurred by increased motion picture employment, added 1,800; Financial Activity, 900; and Resources and Mining, 600.
Seven major industry sectors lost jobs. Government lost 9,600; Manufacturing, 6,500; Education and Health, 3,400; Trade, Transportation, and Utilities, 3,000; Professional and Business Services, 1,800; Construction, 400; and Leisure 400.
On a year-over-year basis, five industry sectors added jobs, while seven declined. From July 2002 to July 2003, employment rose by 32,000 in Leisure and Hospitality, 21,400 in Education and Health, 20,600 in Construction, 15,400 in Financial Activities, and 800 in Resources and Mining. Over the year, employment fell by 60,300 in Manufacturing, 14,500 in Government, 12,700 in Professional and Business Services, 11,500 in Trade, Transportation, and Utilities, 10,500 in Information, and 3,500 in Other Services.
California’s unemployment rate dropped to 6.6 percent in July, down from an upwardly revised 6.8 percent in June (originally reported at 6.7 percent). Civilian employment rose (16,000) and unemployment fell (32,000). (The national unemployment also fell two-tenths of a percent in July to 6.2 percent, marking the first drop in the national rate since January). A year ago, the state’s unemployment rate was 6.7 percent.
Homebuilding slowed in June. Residential construction, as measured by permit issuances, fell to a seasonally adjusted, annual rate of 179,000 from May’s annual rate of 205,000 units—nearly a 13 percent decline. For the first half of the year as a whole, however, residential construction averaged 30 percent more than the same months of 2002. On a percentage basis, multi-family residential construction achieved the greatest gain, rising 66 percent above its 2002 rate for the first 6 months.
Nonresidential construction, as measured by the value of permits issued, dipped in June—the fourth month-over-month drop in 2003. Although permitting slowed in all commercial building categories, sluggish office construction continued to account for the bulk of the slowdown. Overall, the pace of commercial construction during the first six months of 2003 was off 5.1 percent from the same months of last year.
Monthly Cash Report
Preliminary General Fund agency cash for July was $171 million above the 2003 Budget Act forecast of $4.141 billion.
Personal income tax revenues were $116 million above the month’s forecast of $2.166 billion. Withholding receipts, which were 7.9 percent above the year-ago level, were $34 million above the month’s estimate of $2.069 billion. Other receipts were $61 million above the projected level of $258 million and refunds were $21 million below the estimate of $161 million.
Sales and use tax receipts were $65 million above the month’s forecast of $1.493 billion. July represents the final payment for second quarter taxable sales, which was due on July 31, and a portion of this payment is received in early August. July cash more than offsets the $26 million shortfall in the June prepayment. A more complete picture of second quarter sales will be available in mid-August, when all of the second quarter receipts have been processed.
Corporation tax revenues were $6 million above the month’s estimate of $243 million. Prepayments were $15 million above the estimate of $175 million. Other payments—which include final payments and other miscellaneous payments—were $28 million below the forecast of $139 million. Refunds were $19 million below the projected level of $71 million.
General Fund Agency Cash
2003-04 Governor's Budget Act Forecast
2003-04 Comparison of Actual and 2003 Budget Act Forecast
Agency General Fund Revenues
For more information, please contact the
California Department of Finance,
Room 1145, State Capitol, Sacramento, CA or call (916) 323-0648.
