February saw more strong job growth in California. The state’s inflation rate was on the rise, reflecting rising housing and energy costs.April and May clearly show that while California’s economic growth continues, it has slowed from the extraordinary 2000 performance. The state’s slowdown is predominantly centered in the San Francisco Bay Area.
Nonfarm employment increased by 3,200 in May, compared to gains of 20,000 in April and 60,000 in March. Nationally, nonfarm employment fell by 19,000 during May. Since the beginning of the year, California has accounted for 73 percent of all new nonfarm jobs in the nation, and 63 percent of all new US jobs over the past year.
Nonfarm employment increased by 3,200 in May, compared to gains of 20,000 in April and 60,000 in March. Nationally, nonfarm employment fell by 19,000 during May. Since the beginning of the year, California has accounted for 73 percent of all new nonfarm jobs in the nation, and 63 percent of all new US jobs over the past year.
During May, government added 8,400 jobs, with reductions in federal and state government employment more than offset by a 10,800 increase in local government—mainly education. In the private sector, financial services added 2,100 jobs, wholesale trade was up 1,500, and transportation/utilities increased by 1,000.
Services fell 6,400, due in part to a decline of 1,300 in computer services (not seasonally adjusted), the first such decline since the series has been reported beginning in January 1996. Manufacturing was down 1,500, with the electronics industries falling by 2,400. On a yearly comparison, manufacturing is down 5,400. Nationally, factories dropped 124,000 jobs in May and 614,000 over the past year.
California's unemployment rate was unchanged in May at 4.9 percent, although the April rate was revised up 0.1 percentage point from the 4.8 percent originally reported. The rate a year ago was 5.0 percent. While still low by state and national standards, the unemployment rate of all San Francisco Bay Area counties rose in May.
Residential building in April, measured by the number of building permits issued, rose 13.0 percent from one year ago. Single-family construction was up 4.8 percent, while the volatile multifamily sector posted a gain of 43.7 percent.
Nonresidential construction, measured by permit values, continued to slide from the January peak. Although April permits were up only 0.9 percent above the April 2000 level, dollar value during the first four months of 2001 ran 7.7 percent above the same period last year. Strong office construction growth continues to lead nonresidential construction gains, with the largest increases occurring in the San Francisco Bay Area.
Several developments in California public works construction, including major power plant projects, bode well for California’s outlook. Heavy (civil works) construction begun during the first four months of 2001 totaled $4.05 billion, up 29.6 percent from the same period in 2000, with substantial growth in power plant construction. Four large power plant projects were started in Kern, San Bernardino, and Monterey counties, totaling $1.3 billion.
According to the California Association of Realtors, California’s real estate market is beginning to cool off, especially in Santa Clara County—the state’s costliest region. Statewide sales of existing single-family homes clocked a seasonally adjusted annual rate of 495,390 units in April, up a scant 0.5 percent from one year ago. Following a significant run-up in March, the median price of a single-family home dropped to $262,420 in April.
In Santa Clara County, the median price of an existing single family home declined to $530,000, 5.4 percent less than the April 2000 median. Sales of existing homes in the county fell dramatically, down 39.5 percent from a year ago.
Industry Employment Growth Slows
Monthly
Cash Report
Preliminary General Fund agency cash for May was $34 million below the 2001-02 May Revision forecast of $4.44 billion. Including adjustments for actual April receipts that were not known when the May Revision forecast was prepared, year-to-date, revenues are $41 million higher than the $70.855 billion that was expected. Although May is a significant revenue month, June is far more important. As the second-largest month of the year, $8.6 billion is expected during June.
General Fund Agency Cash
2001 May Revision Forecast
2000-01 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.
