California’s
economy continues to give mixed signals, with alternating ups and downs in
employment, construction and real estate. While the economic slide has
been halted for some time, a full-fledged recovery has yet to take hold.
California’s
industry employment rose by 19,800 in October—the strongest
one-month gain since January 2001—and continued this year’s
pattern of alternating gains and losses. Nonfarm
employment has risen five months this year and fallen during the
other five, although the changes have been small.
The
chief contributor to October’s gain was local education.
In September, an unusual drop in school employment was a
principal source of a fall in industry employment. These
variations are most likely due to the difficulty of seasonally
adjusting public school employment estimates in the early months
of the school year.
The
gains in local education made government the leading job creator
among major industry sectors in October. The transition of
airport security screeners to federal payrolls also
helped. Overall, government employment was up 15,700.
Employment
in wholesale and retail trade increased by 6,400 in
October. Wholesale trade—including import, export,
trucking and warehousing firms—added 4,000 jobs. Retail
trade added 2,400 jobs, led by eating and drinking
establishments (2,000) and food stores (1,600).
Manufacturing
continued to be the leading source of losses in October by
shedding 8,100 jobs. On-going weakness in electronics was
instrumental in durable manufacturing employment falling by
3,800. Reductions in food processing led the nondurable
sector to drop 4,300 jobs.
On
a year-over-year basis, nonfarm employment in California fell by
23,100 (or 0.2 percent) in October. Manufacturing lost the
most jobs—64,200—with losses nearly across the board.
The only manufacturing industry that added jobs over the year
was the small chemical industry. Outside of manufacturing,
transportation and public utilities, employment declined by
29,900 and construction employment fell by 14,800.
Government continued to be the state’s leading job‑growth
engine—adding 60,700 jobs over the year.
California’s
unemployment situation held steady in October with the
unemployment rate unchanged at 6.4 percent. Civilian
employment increased (65,000), unemployment fell (7,000), while
the labor force expanded enough (58,000) to leave the
unemployment rate unchanged.
A
slide in consumer confidence contributed to a 12 percent drop in
sales of existing single-family detached homes in
September. Sales totaled 493,800 units, at a seasonally
adjusted annual rate, and made September the slowest home-buying
month of 2002. Home sales have fallen three out of the
last five months. The pace of sales during the last five
months averaged 550,000 units, 9 percent below the 606,000
average set during the first four months of the year.
California
single-family home prices appear to be in a holding
pattern. Since the January-to-April surge, during which
prices climbed an average of 3 percent each month, the median
price of detached single-family homes has barely budged from the
$324,000 mark.
Homebuilding
in California continued its see-saw behavior in September by
registering a nearly 8 percent gain in permitted units—for a
seasonally adjusted annual rate of 168,360 single and
multi-family units. This followed an 11 percent drop
in August.
Monthly Cash Report
Preliminary General Fund agency cash for October was $312 million below the 2002 Budget Act forecast of $4.547 billion. Year-to-date, revenues are $381 million below expectations.
Personal
income tax revenues were $88 million below the month’s
forecast of $2.303 billion. Withholding was
$86 million below the estimate of $2.098 billion and
refunds were $70 million above the projected level of $195
million. Other receipts, which were $68 million above the
forecast of $400 million, partially offset the shortfall.
Year-to-date, this tax is $283 million under forecast.
Sales
and use tax receipts were $6 million above the month’s
forecast of $1.792 billion. The final payment for
third-quarter taxable sales was due at the end of October and a
portion of this payment is received in early November. At
the time this bulletin was prepared, early November receipts
were not yet complete; a clearer picture of third-quarter sales
will be available by mid-November. Year-to-date through
October, the sales tax is $111 million above expectations.
Corporation
tax revenues were $61 million below the month’s forecast of
$242 million. Prepayments were $17 million above the
estimate of $173 million and other payments exceeded the
estimate of $136 million by $30 million. The combined
gain, however, was offset by refunds, which were $108 million
above the projected level of $67 million. Year-to-date,
this tax is down $118 million from forecast.
Revenues from the insurance, estate, alcoholic beverage, and tobacco taxes came in $8 million above the $105 million that was expected. The remaining revenues—pooled money interest income and “other” revenues—were $177 million lower than the month’s estimate of $105 million. This difference was due to the “other” category, with monthly revenues of -$84 million rather than the $88 million expected.
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.
