Updated Unemployment Insurance Fund Forecast Shows Structural Deficit January 16, 2024
The administration's most recent Unemployment Insurance (UI) Trust Fund forecast shows that UI benefit payments will exceed state payroll tax receipts by $1.7 billion in 2024, after surpassing receipts by $1.3 billion in 2023. As a result, the state's outstanding UI loan from the federal government is set to increase over the next two years, despite automatic employer payroll tax increases to repay the loan.
Holiday Hiring Sluggish January 3, 2024
October and November holiday season retail job growth remained relatively weak for the second year in a row. One plausible explanation for this weakness might be the continued transition to online holiday shopping, but transportation and warehousing jobs (where goods and packaged and delivered) has also been sluggish this holiday season.
U.S. Retail Sales Update: November 2023 December 14, 2023
U.S. retail sales have grown 0.9 percent over the last 3 months and 4.1 percent over the last 12 months. Both of these growth rates outpaced inflation.
Newest Early Revision Suggests State Saw No Job Gains Over 9-month Period December 14, 2023
A newly released "early benchmark" of the official state jobs figures shows that payroll jobs remained essentially flat from September 2022 through June 2023, whereas the soon-to-be-revised official state tally showed growth of 2.1 percent over that period. This amounts to a 9-month job gain of just 6k, compared to the unbenched of 282k jobs.
Cannabis Tax Revenue Update: November 2023 November 30, 2023
Our new forecast for 2023-24 cannabis retail excise tax revenue: $702 million. This is $206 million above the budget package assumption.
How Does Tech Company Equity Pay Affect Income Tax Withholding? November 16, 2023
California's technology companies, including giants like Apple, Google, Nvidia, and Meta, are some of the most valuable companies in the world and support thousands of high-paying jobs in the state. Many employees at these companies receive equity pay, such as stock options, as part of their compensation. State income tax withholding on this equity pay has grown notably, reaching 6 percent in the last few years. The recent jump in these companies' stock prices, which affects withholding on equity pay, has bolstered otherwise weak income tax withholding during 2023.
U.S. Retail Sales Update: October 2023 November 15, 2023
U.S. retail sales have grown 1.5 percent over the last 3 months and 2.5 percent over the last 12 months. Retail sales growth has outpaced inflation over the last 3 months, but not over the last 12 months.
U.S. Retail Sales Update: September 2023 October 17, 2023
U.S. retail sales have grown 2.1 percent over the last 3 months and 3.8 percent over the last 12 months. Retail sales growth has well outpaced inflation over the last 3 months, but not over the last 12 months.
Uptick in Unemployment Rate Triggered a Recession Indicator October 3, 2023
The recent uptick in the unemployment rate, from 3.8 percent to 4.6 percent, has triggered a state version of the "Sahm Rule," a real-time indicator of the start of an economic downturn.
Did California Enter a Recession Last Fall? October 3, 2023
While recessions are not formally defined for state economies, economic data for the fourth quarter of 2022 and first quarter of 2023 appear consistent with California experiencing a mild recession. The apparent start of a recession in California last fall helps explain why the state faced a revenue shortfall in its most recent budget. How much the economy will continue to dampen the state's fiscal picture moving forward is unclear. However, the threat that the recent slowdown could persist will be a significant risk for the foreseeable future.
U.S. Retail Sales Update: August 2023 September 14, 2023
U.S. retail sales have grown 1.2 percent over the last 3 months and 2.5 percent over the last 12 months. Retail sales growth has outpaced inflation over the last 3 months, but not over the last 12 months.
Cannabis Tax Revenue Update August 30, 2023
The 2023-24 budget package anticipated a funding shortfall for programs supported by cannabis tax revenues. Our new revenue estimates are higher, yielding a smaller funding shortfall.
U.S. Retail Sales Update: June 2023 July 18, 2023
U.S. retail sales have grown 1.1 percent over the last 3 months and 1.5 percent over the last 12 months. Retail sales growth has outpaced inflation over the last 3 months, but not over the last 12 months.
U.S. Retail Sales Update: May 2023 June 15, 2023
U.S. retail sales have been roughly flat (0.2 percent decline) over the last 3 months and grown 1.6 percent over the last 12 months.
Cannabis Tax Revenue Update: May 2023 May 23, 2023
The May Revision anticipates a funding shortfall for programs supported by cannabis tax revenues. Our new revenue estimates are slightly higher, yielding a slightly smaller funding shortfall. Specifically, our estimate for 2022-23 cannabis retail excise tax revenue is $509 million. This is $24 million above the administration’s May Revision estimate but $133 million below the January Governor’s Budget estimate.