California’s economy remains strong, but rising home, gasoline, and energy prices are putting upward pressure on prices. Construction activity was mixed in October but was still up from a year ago.
Recently revised employment estimates show that California had about 75,000 fewer jobs in 2001 than the establishment survey had indicated during the year. Job losses in computer services and personnel supply accounted for almost all of the downward revision. The December 2001 and January 2002 labor market reports, however, paint a brighter picture of California’s economic condition. In particular, the state’s travel and tourism industry seems to be shrugging off the impacts of the September 11 attacks.
Following the annual benchmark
revisions to California’s employment estimates, industry employment
expanded by 30,200 in January. The
benchmarking also revised December’s initially reported drop
of 600 jobs to a gain of 10,900 (from November).
Thus, over 40,000 industry jobs have been created since October 2001.
Job gains in January were led
by retail trade (12,700), services (10,500), and government (5,500).
The post-holiday layoffs by retailers were apparently milder than
normal—a good sign. Manufacturing
employment held steady overall, as gains in nondurable manufacturing exactly
offset losses in durables stemming from continued weakness in the high-tech
sector.
Employment in California’s
service sector expanded for the second consecutive month in January.
Business services, which accounts for over a quarter of total service
employment, added 1,200 jobs—the first month-over-month gain since July
2001. Amusement and recreation
places led service sector growth—a sign of the state’s recovery from the
post-September 11 ills. In the same vein, hotel and lodging places added
1,400 jobs, the first gain in seven months.
On a year-over-year basis,
total industry employment fell by 40,200, or 0.3 percent.
Manufacturing lost 126,000 jobs, with all sectors participating,
except chemicals. The losses
were led by high technology electronics.
Transportation and public utilities lost over 22,500 jobs,
principally in air transportation. Services
lost over 14,300 jobs, led by declines in business services (80,000) and
motion pictures (19,900). Government
was the year-over-year growth leader, adding 80,000—mostly local
government—jobs.
California's unemployment
rate, which is estimated from a limited survey of households, edged up to
6.2 percent in January. Both
the number of unemployed and the labor force increased in January.
The rate stood at 4.7 percent in January 2002.
In another sign of recovery from September 11, home sales posted a
year-over-year increase in January—their first since last September.
After four sluggish months, sales of single-family homes jumped over
23 percent in January to a seasonally adjusted annual rate of 584,250 units.
This is 16 percent above the sales posted in January 2001.
California’s median single-family home price in January reached
$285,860, a 17 percent increase from a year ago.
Bouncing Back From September 11
Monthly
Cash Report
Preliminary General Fund
agency cash for February was $210 million below the 2002-03 Governor’s Budget
forecast of $3.628 billion. Year-to-date,
revenues are $954 million lower than the $42.548 billion that was expected.
Personal income tax revenues
were $224 million below the month’s forecast of $1.312 billion.
Withholding was $87 million below the estimate of $2.02 billion and
other payments were $29 million higher than the $147 million that was
expected. Refunds were $166
million above the projected level of $855 million but since February is only
the first of several significant months for 2001 tax year refunds, it is not
clear how much of this month’s increase may be due to cash flow.
Year-to-date, personal income tax revenues are $1.022 billion below
the forecast.
Sales and use tax receipts
were $13 million below the month’s forecast of $2 billion.
February cash includes the remaining portion of the final payment for
fourth quarter 2001 sales, which was due January 31. In addition, the first prepayment for first quarter 2002
sales was due in February. The
first prepayment for first quarter sales appears to be tracking, therefore
the gain experienced in January appears to represent increased sales
activity in the fourth quarter of 2001.
Year-to-date, sales and use tax revenues are $158 million above the
forecast.
Corporation tax revenues were
$38 million above the month’s forecast of $113 million.
Prepayments were $6 million above the estimate of $99 million and
other payments were $10 million above the forecast of $70 million estimate.
Refunds were $22 million below the projected level of $56 million.
Year-to-date, corporation tax revenues are $220 million below the
forecast.
General Fund Agency Cash
2002-03 Governor's Budget 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.
