Although
California added more industry jobs in October than during any month since
December 2000, much of the gain came from increased hiring in anticipation of
the walkout of 70,000 Southern California grocery workers. The monthly
labor survey for October did not reflect the strike but November’s will,
presaging a softer employment picture next month.
Nonfarm
payroll employment grew by 34,800 in October and September’s
losses were revised down to 10,900 from the initially reported
loss of 16,600. From October 2002 to October 2003,
California nonfarm employment fell by 32,900, or 0.2 percent.
Additional
hiring by grocery stores in preparation for the Southern
California grocery workers strike boosted grocery store
employment by possibly as much as 20,000 in October. This
led the Trade, Transportation and Utilities sector
to grow by 30,800 jobs in October. Five other major
industry sectors also added jobs: Professional and
Business Services added 9,000 jobs; Construction, 7,600; Leisure
and Hospitality, 3,100; Natural Resources and Mining, 200; and
Other Services, 100. Five major industry sectors lost jobs
in October: Government lost 12,200 jobs; Information,
1,700; Educational and Health Services, 800; Manufacturing, 700;
Financial Activities, 600.
On
a year-over-year basis, five industry sectors added jobs, while
six declined. From October 2002 to October 2003,
employment rose by 23,500 in Leisure and Hospitality, 21,900 in
Construction, 18,300 in Educational and Health Services, 17,700
in Trade, Transportation and Utilities, and 8,100 in Financial
Activities. Over the year, employment fell by 44,100 in
Manufacturing, 39,100 in Government, 18,800 in Information,
16,300 in Professional and Business Services, 4,000 in Other
Services, and 100 in Natural Resources and Mining.
California’s
unemployment rate rose 0.1 percentage point to 6.6 percent in
October, returning to the 6.6 percent-to-6.8 percent band
it has been in for most of this year. A year ago,
California’s unemployment rate was 6.8 percent. Civilian
employment rose by an extraordinary 83,000 in October, while
unemployment grew 24,000. This growth means that the
civilian labor force grew 107,000 in October, making it the
second largest month-to-month gain on record.
Homebuilding
has followed a seesaw pattern of alternating months of growth
and slowing for nearly all of 2003. September continued
this trend by reversing a slowdown in August. Even though
home building during the first nine months of 2003 registered a
nearly 22-percent gain over the same months of the previous
year, most of that was due to a surge of activity during the
first three months. The average year-over-year gain for
the latest quarter (July – September) was only 6.5 percent.
Total residential construction, as measured by permit issuances,
reached a seasonally adjusted annual rate of 190,000 units in
September, a 4.1 percent increase from a year ago.
In
September nonresidential construction recovered from the severe
slowdown in the prior month. Following a nearly 21-percent
drop in August, construction activity, as measured by the value
of permits issued, rose 12 percent
in September. Continued reductions in office construction
were more than offset by increases in store, industrial,
parking, amusement, and hotel/motel construction. The pace
of total nonresidential construction during the first nine
months of 2003 was off 3 percent from the same months of 2002.
Even
though existing home sales softened slightly in September, they
still maintained a very strong pace. Home sales reached
631,880 units on a seasonally adjusted-annual rate basis, a
2.1-percent fall from the exceptionally strong pace set in
August. During the first nine months of 2003, the pace of
existing home sales is 2.8 percent greater than the same months
of 2002.
Following the trend in home sales, existing home prices also softened. The median price of existing single-family homes sold in September slipped below the $400,000 mark, which it breached in August. Even though the median price fell 5.0 percent to $380,040, it was still nearly 18 percent above the September 2002 median price.
Home Building Moderates During 2003
Monthly Cash Report
Year-to-date, revenues are $728 million above forecast. Excluding the “other revenues” category, which includes the tobacco bond revenues, agency cash is $67 million above forecast for the month and $585 million above forecast year-to-date. In total, General Fund agency cash for October was $1.924 billion below the 2003 Budget Act forecast of $6.602 billion. However, this is a cash flow loss only, due to the fact that $2.264 billion in tobacco bond revenues were received at the end of September, rather than in October.
Personal
income tax revenues were $34 million above the month’s
forecast of $2.338 billion. Withholding was close to
target for the month, coming in $1 million below the $2.122
billion that was estimated. Other receipts were $99 million
above the forecast of $508 million, but refunds, which were $64
million above the projected level of $292 million, largely
offset this gain. Year-to-date through October, this tax
is $529 million above forecast.
Sales
and use tax receipts were $67 million above the month’s
forecast of $1.8 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, the sales
tax is $109 million above forecast.
Corporation
tax revenues were $37 million below the month’s forecast of
$297 million. Prepayments and other payments were $12
million and $39 million below the estimates of $209 million and
$189 million, respectively. The combined loss, however,
was partially offset by refunds, which were $14 million below
the projected level of $101 million. Year-to-date,
this tax is up $9 million from forecast.
Revenues from the insurance, estate, alcoholic beverage, and tobacco taxes came in $18 million above the $95 million that was expected. The remaining revenues—pooled money interest income and “other” revenues—were $2.006 billion lower than the month’s estimate of $2.072 billion. This difference was due to the “other” category, with monthly revenues of $64 million rather than the $2.055 billion expected. The estimate assumed $2 billion in tobacco bond moneys would be received in October, however, $2.264 billion was received at the end of September. Year-to-date, “other” revenues are $143 million above forecast.
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.
