After apparently feeling the effects of the national slowdown in November, California’s condition turned up in December as industry employment all but held steady and the unemployment rate inched down. Residential construction also strengthened considerably.
Following three months of significant job losses averaging over 29,000 per month, California’s industry employment fell by only 600 jobs in December. Performance was mixed across industries with no dominant loser or gainer. Government employment grew, as did construction and service jobs. Losses occurred in transportation, manufacturing, and wholesale and retail trade.
Manufacturing employment
dropped 3,600 in December with reductions in both durable and nondurable
industries. In contrast to
November when losses came from both electronics and construction-related
industries, December’s losses were almost entirely centered in
electronics. Among nondurable
goods manufacturers, food processors lost the most jobs. On average, however, California manufacturers fared better
than their counterparts in other states as 122,000 manufacturing jobs were
lost nationwide in December.
California’s service
sector, after cutting over 17,000 jobs in November, reversed course and
added 1,000 jobs in December. Business
services, which is dominated by computer programming and personnel supply
firms, dropped 4,500 jobs, for the eighth consecutive month-over-month
reduction. However, this was a
much smaller drop than November’s. Hotel
and lodging places shed 2,500 jobs, marking the seventh consecutive
month-over-month loss. Service
employment gains were led by motion pictures, which lost jobs in October and
November, and health, personal, and social services. Amusement and recreation, which suffered September 11-related
losses in November, added 800 jobs in December.
Government led the state
in job growth again in December, with local government (public schools)
essentially responsible for all of the gains.
On a year-over-year
basis, total industry employment fell by 38,100, or 0.3 percent—the first
year-over-year loss of the recession. Manufacturing
lost 92,700 jobs, primarily in high technology electronics. Transportation and public utilities
lost over 19,000 jobs, mostly in air transportation. Services lost over 18,000 jobs led
by declines in business services (33,900), motion pictures (12,900), lodging
(9,500), and amusement (9,200).
Government was the
year-over-year job growth leader, adding 65,000 jobs. Wholesale and retail trade followed
with 25,400 jobs. The finance
sector also grew, adding 15,200, principally in banking and real estate.
California's unemployment
rate dropped to 6.0 percent in December, one-tenth of a percentage point
lower than November’s revised rate. In
the months leading up to December, unabated labor force growth helped push
up the state’s unemployment rate. However,
as the economy slows and job opportunities diminish, the labor force
typically shrinks, and in December the labor force fell by 65,100 while the
number of persons unemployed fell by 21,600. The unemployment rate was 4.7 percent a year ago. Over the year, the national jobless
rate has climbed from 4.0 percent to 5.8 percent.
California's Unemployment Rate Dips
Monthly
Cash Report
Preliminary General Fund agency cash for January was $514 million below the 2002-03 Governor’s Budget forecast of $8.408 billion. Year-to-date, revenues are $743 million below forecast. The variance between January and year-to-date cash results from differences between actual and estimated December revenues.
Personal income tax revenues
were $807 million below the month’s forecast of $6.342 billion. Estimated payments for the fourth
quarter of 2001, which were due in mid-January, accounted for the bulk of
the shortfall. These payments, which represented a year-over-year decline of
roughly 36 percent, were $1.003 billion lower than the forecast of $3.734
billion. Withholding was $233
million above the $2.578 billion that was expected and although this was
higher than forecast, it was still $287 million or 9.3 percent below last
January’s level. Other
receipts of $130 million came in as forecast and refunds were $37 million
above the projected level of $100 million.
Sales and
use tax receipts were $159 million above the month’s forecast of $1.769
billion. January cash
represents the final payment for fourth quarter 2001 sales, which was due on
January 31. Some of the cash
from this final payment spills over into February. It is unclear at this time to what
extent January’s receipts represent increased sales activity or
accelerated cash flow from February.
Corporation tax revenues were $4 million above the month’s forecast of $65
million. Prepayments were $12
million below the estimate of $145 million and other payments fell $2
million short of the $89 million estimate.
Refunds were $18 million below the projected level of $169 million.
General Fund Agency Cash
2002-03 Budget Act Forecast
2001-02 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.
