Labor market conditions improved modestly in California in June. The state’s labor force increased while the number of unemployed fell. The state’s unemployment rate was unchanged as the national rate continued to increase, making the gap between the two smaller than it has been since 1990. Also, industry employment grew in the state, countering a loss in the rest of the nation
Industry
employment rose by 5,100 in June, and May’s estimated job loss
was revised downward. June’s increase, albeit small, was
the first month-to-month gain since January 2003. May’s
decline was revised down from an initially reported 21,500 to
13,400. Meanwhile, the nation lost 30,000 jobs in June.
From June 2002 to June 2003, California nonfarm employment fell
by 51,300.
Six
major industry sectors added jobs in the state in June.
Leisure added 5,200; Financial Activity, 3,400; Government,
3,400; Education and Health, 1,900; Information, 600; and
Resources and Mining, 300.
Five
major industry sectors lost jobs. Manufacturing lost
4,900; Trade, Transportation, and Utilities, 2,200 jobs;
Construction, 1,300; Other Services 1,100; and Professional and
Business Services, 200.
On
a year-over-year basis, four industry sectors added jobs, while
seven lost jobs. From June 2002 to June 2003, employment
rose by 30,700 in Education and Health, 20,400 in Leisure and
Hospitality, 15,700 in Construction, and 13,300 in Financial
Activities. Over the year, employment fell by 66,300 in
Manufacturing, 33,100 in Information, 17,100 in Professional and
Business Services, 7,200 in Trade, Transportation, and
Utilities, 4,300 in Other Services, and 3,400 in Government.
Resources and Mining employment was unchanged.
California’s
unemployment rate held steady at 6.7 percent in June, unchanged
from an upwardly revised 6.7 percent in May (originally reported
at 6.6 percent). Civilian employment rose (58,000) and
unemployment fell (6,000), but not enough to change the overall
unemployment rate. (The national unemployment rate rose
three-tenths of a percent in June to 6.4 percent. Thus the
gap between the California and national rates shrank to 0.3
percent, the smallest since September 1990.) A year ago,
the state’s unemployment rate was 6.7 percent.
Homebuilding
expanded in May. Residential construction, as measured by
permit issuances, reached a seasonally adjusted, annual rate of
204,000 units—nearly a 30 percent increase over May 2002.
Residential construction during the first five months of 2003
increased an average of 32 percent over the same months of 2002.
Nonresidential construction slowed in May continuing a saw-tooth
pattern of monthly ups and downs. Overall, the pace of
commercial construction during the first five months of 2003,
measured by the value of permits issued, was 5.1 percent
below the same months of last year. Nearly 80 percent of
this slowdown is accounted for by reduced office and hotel/motel
construction.
Existing
home sales slowed in May, falling 1.9 percent from
April’s pace. Home sales have fallen below their
year-ago pace for four out of the first five months of 2003.
Home sales reached a seasonally adjusted, annual rate of 572,270
units in May, or 7.7 percent below the exceptionally strong
sales pace set in May 2002.
Monthly Cash Report
Preliminary General Fund agency cash for June was $123 million above the 2002-03 May Revision forecast of $7.286 billion. Year-to-date revenues are $272 million higher than the $68.108 billion that was expected.
Personal
income tax revenues were $254 million above the month’s
forecast of $3.171 billion, with the gain being spread across
all components. Withholding was $61 million above the
month’s estimate of $1.866 billion and the second quarterly
estimated payment for the 2003 tax year came in $69 million
above the projected level of $1.295 billion. Other
receipts were $30 million above the $244 million estimate and
refunds were $94 million below the $234 million that was
expected. Year-to-date personal income tax receipts are
$492 million above the May Revision forecast and most, if not
all, of this appears to be a real gain from forecast. Of
the total gain, $401 million is attributed to 2002 activity in
the form of final payments, miscellaneous payments, and refunds.
Withholding and estimated payments, both of which reflect 2003
activity, account for $29 million and $62 million, respectively.
Sales
and use tax receipts were $26 million below the month’s
forecast of $2.264 billion. June represents the
second prepayment for second quarter sales. A more
complete picture of second quarter sales will be available in
mid-August, when all of the second quarter receipts have been
processed. Year-to-date, sales tax receipts are $120 million
less than anticipated.
Corporation
tax revenues were $52 million below the month’s estimate of
$1.25 billion. June receipts primarily reflect the second
prepayment for calendar year corporations, which were $54 million
below the forecast of $1.153 billion. Other payments were
$33 below the forecast of $199 million and refunds were $35
million below the projected level of $102 million.
Cumulatively through June, corporation tax revenues are $46 million
below expectations.
General Fund Agency Cash
2003-04 Governor's 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.
