For the first time this year, California garnered its share of national employment
gains. California added 23,600 industry jobs in May, or 0.2 percent—a
pace that matched the nation's May employment growth. Even though the state's
employment gains have been below historical standards, industry employment
has grown for three consecutive months (and four out of the first five months
of 2004) and the pace is accelerating. Other indicators, such as nonresidential
construction, have also given signals that more substantial job growth should
- Nonfarm payroll employment rose by 23,600 in May, which brings the year-to-date
gain to 84,600. May's advance was broad-based, with growth in 9 out of
11 major sectors. Information added 7,400 jobs; Professional and Business
Services, 6,600; Trade, Transportation and Utilities, 4,500; Leisure and
Hospitality, 3,800; Educational and Health Services, 3,300; Construction,
3,100; Other Services, 2,800; Financial Activities, 1,700; and Manufacturing,
400 (its second consecutive gain). In the negative column, Government lost
9,800 jobs; and Natural Resources and Mining, 200;
- May marks the fifth consecutive month that California employment exceeded
its year-ago level. While the gains are modest in historical terms—varying
between 0.1 percent in January and 0.8 percent in May—the trend
is looking up and the employment situation is clearly improving. On a year-over-year
basis, California nonfarm employment rose by 110,200. Employment over the
year rose by 62,500 in Professional and Business Services; 33,300 in Trade,
Transportation and Utilities; 30,400 in Educational and Health Services;
27,500 in Construction; 20,600 in Leisure and Hospitality; 14,000 in Financial
Activities; and 300 in Natural Resources and Mining. Employment fell by 46,700
in Government; 21,800 in Manufacturing; 8,600 in Information; and 1,300 in
- California's unemployment rate held steady at 6.2 percent in May after
falling dramatically in April from a revised 6.6 percent in March. This drop brings the unemployment rate back in line with the rates established earlier this year. The rate in January was 6.2 percent, followed by 6.3 percent in February. In May, civilian employment expanded by 36,000 and unemployment fell by 11,000.
- The national unemployment rate was 5.6 percent in May, also unchanged from
April. This places California's unemployment rate just 0.6 percentage point above the national rate.
- Robust single-family homebuilding sustained modest residential construction
growth in April. Total residential construction, as measured by permit
issuances, reached a seasonally adjusted annual rate of 197,000 units in
April, a 5.0-percent increase from April 2003. During the first four months
of 2004, total residential construction is up 1.0 percent from the same period
- Nonresidential construction continued a healthy expansion in April with
a nearly 20 percent year-over-year gain as measured by the seasonally
adjusted value of permits issued. This growth is being led by substantial
growth in office and retail construction as well as alterations and additions.
Total nonresidential construction permitting during the first four months
of 2004 is up 7.7 percent from the same period in 2003.
- Existing single-family home
sales stabilized in March following slowdowns in January and February.
Overall, home sales during the first quarter of 2004 are 4.4 percent better
than the first quarter of 2003.
- Home sales during the first quarter averaged
598,367 units on a seasonally adjusted-annual rate basis. Home sales growth
has also maintained rising home prices. The median price of existing single-family
homes sold in March reached $428,280, more than 21 percent above the
March 2003 median.
Job Growth Accelerates
Monthly Cash Report
Preliminary General Fund agency cash for May was $257 million below the
2004-05 May Revision forecast of $4.275 billion. Including adjustments for
actual April receipts that were not known when the May Revision forecast was
prepared, year-to-date revenues are $246 million lower than the $67.514 billion that was expected.
- Personal income tax revenues were $79 million below the month's forecast
of $1.599 billion. Although withholding was $26 million below the estimate
of $2.074 billion, it was 2.9 percent above the year-ago level. Withholding
continues to post year-over-year increases, which is a good indication that
wages are strengthening in 2004. Other payments, which include final payments
for the 2003 tax year, were $42 million below the $511 million that was expected
and refunds were $11 million above the estimate of $986 million. The second
estimated payment for the 2004 tax year is due in mid-June.
- Sales and use tax receipts were $54 million below the month's forecast
of $2.071 billion. May represents the balance of the final payments for first
quarter taxable sales as well as the first prepayment for second quarter
sales. Because of a final negative adjustment for fourth quarter 2003 sales,
the details of the final payment and the prepayment are unknown at this time.
- Corporation tax revenues were $67 million below the month's forecast of $239 million. This shortfall is partially a result of a large refund associated with liabilities for prior years. May is not a significant month for this revenue. June will provide a more meaningful measure of how well the estimate is tracking because the second prepayment for calendar year corporations is due mid-month.
- Revenues from the insurance, estate, alcoholic beverage, and tobacco taxes
came in $20 million below the $98 million that was expected, primarily
due to lower-than-expected insurance tax receipts. The remaining revenues—pooled
money interest income and other revenues—were $37 million below the
month's estimate of $268 million.
General Fund Agency Cash
2003-04 Governor's Budget Act Forecast
2003-04 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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