Monthly Jobs Report January 25, 2023

California businesses added 16,000 jobs in December, following a relatively sluggish November (+20k jobs). Though businesses continue to hire, recent reports send mixed signals. From July to December, businesses reported adding 230k jobs. At the same time, 100k fewer Californians reported having work. 


Updated Inflation Outlook January 22, 2023

Based on the most recent economic data, we now estimate that annual inflation will drop to about 4 percent by the second quarter of 2023.


U.S. Retail Sales Update: December 2022 January 18, 2023

U.S. retail sales (seasonally adjusted) declined 1.1 percent from November to December. The two-month decline was 2.1 percent. In the last 30 years, two-month drops of at least 2 percent have happened around recessions. 


Updated 2022-23 "Big Three" Revenue Outlook January 13, 2023

Based on the most recent revenue and economic data, we currently estimate that collections from the state’s “big three” taxes—personal income, sales, and corporation taxes—are likely to fall below the Governor's Budget assumption of $200 billion in 2022-23. 


Inflation Tracker January 12, 2023

Significant increase in inflation over the last couple of years, but recent data are showing declines.


Income Tax Withholding Tracker January 9, 2023

December PIT withholding came in $1.8 billion (about 13 percent) lower than last year. For the fiscal year so far, withholding is running 6.7 percent lower than last year, with all of the weakness coming since the last week of August.


U.S. Retail Sales Update: November 2022 December 15, 2022

U.S. retail sales (seasonally adjusted) declined 0.6 percent from October to November. 


November 2022 Cap-and-Trade Auction Update December 14, 2022

Based on the preliminary results, the state will receive an estimated $961 million in revenue from the most recent quarterly cap-and-trade auction held on November 16, 2022. 


Unemployment Claims Tracker December 9, 2022

Despite worrying signs in some parts of the economy, the labor market remains steady. Seasonally adjusted weekly UI claims held steady over the last several months at between 40,000 and 50,000 claims per week. This level is in-line with UI claims seen during periods of sustained economic growth.


Cannabis Tax Revenue Update November 18, 2022

Cannabis tax revenues have declined for five straight quarters. One part of last quarter’s revenue decline is the lost revenue from the recently eliminated cultivation tax. Despite this policy change, revenues from the retail excise tax declined faster than ever before, indicating that other factors continue to drive down revenues. 


October Tax Collections November 17, 2022

Although October colletions from the state's “big three” tax revenues—personal income, corporation, and sales taxes—came in far ahead of Budget Act assumptions, this is not indicative of better than expected revenue performance for 2022-23 overall. Instead, a closer look at the data shows that the recent trend of revenue weakness continued in October. 


Why Has Income Tax Withholding Lagged, Despite Job Growth? November 16, 2022

2022-23 California income tax withholding is running about 2 percent below last year, despite relatively strong job growth and wage gains that typically drive withholding trends. In this post, we take a closer look at this divergence and explain how smaller employment bonuses and limited IPO activity likely are causing recent weakness in tax withholding. 


How Does the October Inflation Report Change Our Outlook? November 16, 2022

While it was a positive development, the October inflation report did not significantly alter our assessment that there is a high risk of inflation remaining elevated in the budget year and beyond. 


U.S. Retail Sales Update: October 2022 November 16, 2022

U.S. retail sales (seasonally adjusted) grew 1.3 percent from September to October. 


U.S. Retail Sales Update: August 2022 September 15, 2022

U.S. retail sales (seasonally adjusted) grew 0.3% from July to August.