February saw more strong job growth in California. The state’s inflation rate was on the rise, reflecting rising housing and energy costs.
California's unemployment rate remained essentially unchanged at a 31-year low of 4.5 percent in February. January's rate, originally reported at 4.5 percent, was revised up 0.1 percent to 4.6 percent. The unemployment rate in February 2000 was 4.9 percent.
The number of people unemployed in California declined by 25,000 in February and is down 65,000 from this time last year. At 771,000, this is the lowest number of unemployed in the state since January 1990.
Nonfarm employment rose by 38,000 in February, led by an 18,800 rise in services and a 15,700 increase in wholesale and retail trade. Manufacturing fell by 4,100 jobs and the utility sector was essentially unchanged. Within manufacturing, electronics gained 200 jobs, and textiles—which had reported energy-related problems—was unchanged. The largest factory loss was in food processing, which fell 2,100 during the month.
On a year-over basis, the state added 491,000 jobs, a 3.5 percent rise, and all major industry groups registered gains. Of note was an 18,900-job increase in manufacturing, contrasted with a 350,000-job loss nationwide. While high tech factory jobs have leveled off in California, the state has not suffered the big drops in other durable goods manufacturing that has plagued much of the rest of the nation over the past year.
Following a surge in permit activity in January, in part prompted by prospective fee increases, residential building measured by permit activity slowed in February but was down only about 4 percent from February 2000. Although single-family activity declined, multifamily construction posted a major gain of 18.2 percent from a year ago. Total residential permits reached an annual rate of 153,300 units in February, still holding above the full year total of 148,200 units permitted in 2000.
Nonresidential construction, measured by permit values, also slowed from January, but was up 8.4 percent over the year. Office construction again led this growth, supported by exceptionally strong growth in parking garage and service station construction.
Closed escrow sales of existing, single-family homes in California reached a seasonally adjusted annual rate of 486,370 units in February, down 13.3 percent from one year ago. The median price of a single-family home dropped for the fourth month in a row in February. At $245,560, the median home price was up 8.1 percent increase over the February 2000 median—which is also the weakest year-over-year advance since September 1999, possibly portending a leveling off in the sharp rise in housing costs that have helped boost consumer prices in recent months.
With moderating home prices and falling interest rates, California’s home affordability rate registered its first year-over-year improvement in 23 months in February. According to the California Association of Realtors, the state’s home affordability index—the percentage of households that can afford to purchase a median-priced home–reached 35 percent. The San Francisco Bay area remained the least affordable region in the state.
Home Price Inflation Slows
Monthly Cash Report
Preliminary General Fund agency cash for March was $148 million below the 2001-02 Governor’s Budget forecast of $4.541 billion. Year-to-date, revenues are $440 million higher than the $51.770 billion that was expected.
Personal income tax revenues were $326 million below the month’s forecast of $1.561 billion. Withholding receipts were about 1 percent below the year-ago level and were $214 million below the estimate of $2.398 billion. Other payments and refunds were $121 million below the $509 million that was expected. Refunds were $9 million lower than the $1.346 billion that was included in the forecast. April receipts will be critical for this tax, as final returns for the 2000 tax year are filed.
Sales and use tax receipts were $56 million below the month’s forecast of $1.582 billion. March represents the second prepayment for first quarter sales and use tax liabilities. Year-to-date, sales and use tax revenues are $229 million below the forecast. As a reminder, the sales tax rate was triggered down by one-quarter percent beginning with the first quarter. None of the shortfall is attributable to that rate reduction because it was taken into account in the forecast.
Bank and corporation tax revenues were $26 million below the month’s forecast of $1.078 billion. March is a significant month for this revenue because final payments for the 2000 calendar year corporations were due. These payments came in $7 million below the $788 million that was expected. Prepayments were $20 million above the forecast of $344 million and refunds were $39 million higher than the $54 million that was anticipated. April will be another important month for this tax, because the first prepayment for the 2001 calendar year corporations is due April 16. Year-to-date, bank and corporation tax revenues are $86 million above the forecast.
Revenues from the insurance, estate, alcoholic beverage, and tobacco taxes came in $260 million above the $168 million that was expected. This was largely attributable to what appears to be early payments of the insurance tax which was due April 1. March cash receipts for pooled money interest and other revenues were not available from the State Controller’s Office at the time this report was prepared. Therefore, it was assumed that the monthly forecasts for these revenues are tracking. The actual variance will be incorporated in next month’s bulletin.
General Fund Agency Cash
2001-02 Governor's Budget 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.
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