home building and public sectors continue to counter weakness in other
industries leaving California’s economy in a holding pattern.
employment in California fell by 10,500 in November, which means
that despite the growth achieved in October, the state has lost
15,700 jobs over the last three months. All told, during the
first 11 months of 2002, nonfarm employment has fallen by an
average of 800 jobs per month.
foremost source of November’s weakness was manufacturing,
which is still hampered by continuing losses in the high
technology sectors. Both durable and nondurable
manufacturing employment declined, for an overall loss of
9,700. High tech manufacturing accounted for 3,000 of
these losses. Moreover, manufacturing losses have
accelerated recently. During the past five months the
state lost an average of 7,880 manufacturing jobs each
month. During the first six months of the year losses
averaged 3,250. Both the durable and nondurable sectors
in federal employment made government the leading job gainer in
November. The continuing transition of airport security
screeners to federal payrolls boosted federal employment in
California by 2,500, nearly half of the overall public sector
growth. State government payrolls outside of educational
institutions dropped by 600 (not seasonally adjusted) in
and mining were the only other expanding sectors, adding 2,400
and 100 jobs respectively. Service industries dropped
4,100 jobs with notable weakness in computer programming and
temporary services. Construction dropped 1,800 jobs.
Falling airline employment led the transportation and utility
sector to shed 1,500 workers. Wholesale and retail trade
employment fell by 1,100.
November 2001 was the recession’s lowest point for industry
employment, last month’s total of 14,647,000 jobs, actually
represents a negligible year-over-year gain. Losses in
manufacturing (63,100), transportation and public utilities
(23,100), construction (8,400), and mining (600) were
compensated for by growth in government (58,200), wholesale and
retail trade (33,700), services (5,900), and finance, insurance
and real estate (200).
unemployment rate has been essentially unmoved throughout most
of the year—varying little from the 6.4 percent rate
posted in November.
sales rebounded in October following September’s slump.
Existing home sales reached a seasonally adjusted annual rate of
579,240 units in October, a 17 percent increase from one year
rising sales, California single-family home prices continued to
hover near the $324,000 mark in October. The median price
dropped slightly from September to $322,730.
burst of permit issuances for apartment construction in Los
Angeles helped boost residential building in California in
October by 19.5 percent—for a seasonally adjusted annual rate
of 208,268 single and multi-family units. This is the
second consecutive monthly gain following September’s 11
percent advance. On a year-to-date basis, nonresidential
construction permitting during the first 10 months of 2002
exceeds the 2001 rate by almost 11 percent.
construction also gained 7.8 percent in October, spurred by a
surge of industrial construction activity.
Manufacturing Losses Accelerate
Monthly Cash Report
General Fund agency cash for November was $239 million above the 2002 Budget Act
forecast of $4.386 billion. Year-to-date, revenues are $154 million
below expectations. However, adjusting for accounting differences in “other”
revenues, cash for November is $286 million below forecast and cash
year-to-date is $679 million below forecast.
income tax revenues were $285 million below the month’s
forecast of $1.927 billion. Withholding was
$255 million below the estimate of $2.044 billion—11.2
percent below the year-ago level. Other receipts were
$29 million higher than the forecast of $150 million, and
refunds were $59 million greater than the projected level of
$267 million. For the year to date, this tax is $579
million under forecast.
and use tax receipts were $202 million below the month’s
forecast of $2.184 billion. November cash includes the
final payment for third quarter sales, as well as the first
prepayment for fourth quarter sales. Some of this loss
appears to be attributable to the first prepayment of fourth
quarter sales, which was weaker than forecast. However,
due to the late Thanksgiving holiday, a portion of the shortfall
may be due to cash flow. Through November, the sales tax
is $93 million below expectations.
tax revenues were $37 million above the month’s forecast
of $19 million. Prepayments were $6 million below the
estimate of $95 million, while other payments were $17 million
above the $85 million estimate. Refunds were $26
million below the projected level of $161 million. To
date, this tax is down $80 million from forecast.
from the insurance, estate, alcoholic beverage, and tobacco
taxes came in $26 million above the $106 million that was
expected. The remaining revenues—pooled money interest
income and “other” revenues—were $663 million above the
month’s estimate of $150 million. Most of this gain in
the “other” revenues is due to how interest on the energy
bonds was counted. Adjusting for this accounting
difference, we estimate “other” revenues were actually about
$270 million for November, or $136 million above
forecast. We believe this gain is due to cash flow.
General Fund Agency Cash
2002-03 Budget Act Forecast
2002-03 Comparison of Actual and 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.
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