Income Tax Withholding Tracker October 3, 2024
September PIT withholding came in $217 million (3 percent) above projections included in the 2024-25 Budget Act. For the fiscal year so far, 2024-25 PIT withholding is running in-line with budget act projections.
Monthly Jobs Report September 23, 2024
Preliminary reports suggest the state added 6,800 jobs in August. The state's unemployment rate went up from 5.2 percent to 5.3 percent after remaining unchanged for three months.
U.S. Retail Sales Update: August 2024 September 17, 2024
U.S. retail sales have grown 0.9 percent over the last 3 months and 2.1 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 (2024 Q2) September 4, 2024
Our new cannabis tax revenue estimates are similar to the revenues anticipated by the 2024-25 budget package.
Updated "Big Three" Revenue Outlook August 20, 2024
Updated Forecast In Line With Budget Assumptions. Our updated forecast is basically unchanged from last month and remains in line with Budget Act revenue assumptions. That being said, we are only two months into the new fiscal year and it is virtually certain the revenue outlook will change in the coming months. Ultimately, it would not be surprising if revenues ended up $20 billion higher or lower than our estimate for 2024-25 and $35 billion higher or lower for 2025-26.
U.S. Retail Sales Update: July 2024 August 16, 2024
U.S. retail sales have grown 1 percent over the last 3 months and 2.7 percent over the last 12 months. Retail sales growth has outpaced inflation over the last 3 months, but not over the last 12 months.
California Housing Affordability Tracker (2nd Quarter 2024) August 6, 2024
Our post provides an updated snapshot of housing affordability in California. Over the last few years, we have seen a rapid increase in California housing costs, led by the dramatic increase in the costs of purchasing a home. Monthly costs for a newly purchased home are about $2,500 higher than they were just a few years ago. Annual income needed to qualify for a typical home is about $235,000—over 2 times higher than median household income (about $85,000). Further, the annual income needed to qualify for a more affordable "bottom-tier" home is over 50 percent higher than the median income.
IRS Data Show Pandemic Uptick in Outmigration Continues July 31, 2024
Recently released figures from the Internal Revenue Service (IRS) show that California continues to lose taxpayers to other states. The state has long had annual net outmigration (more people moving out of California to other states than moving in) but the trend has increased since 2020. Looking ahead, should the heightened trend of net outmigration continue, it could drag down annual income tax revenue growth below its long-term average.
U.S. Retail Sales Update: June 2024 July 16, 2024
U.S. retail sales have grown 0.1 percent over the last 3 months and 2.3 percent over the last 12 months. Over both periods, sales have grown more slowly than inflation.
California's Private-Sector Labor Market Showing Broad Weakness July 1, 2024
The state's modest job growth over the past two years is a tale of two labor markets. Hiring in public and publicly supported sectors has bouyed job losses in many of the state's high-paying private sectors. While job losses have hit California, nationally these private-sector industries are faring much better.
U.S. Retail Sales Update: May 2024 June 18, 2024
U.S. retail sales have grown 0.4 percent over the last 3 months and 2.3 percent over the last 12 months. Over both periods, sales have grown more slowly than inflation.
Newest Early Jobs Revision Shows No Net Job Growth During 2023 June 17, 2024
A newly released "early benchmark" of the official state jobs figures shows that payroll jobs declined by 32,000 from September 2023 through December 2023, whereas the official state tally showed growth of 117,000 jobs over that period. With the fourth quarter early revision, calendar year 2023 shows essentially no net job gains.
Cannabis Tax Revenue Update May 31, 2024
Our new forecast for 2023-24 cannabis excise tax revenue is $649 million, slightly below the May Revision forecast of $665 million.
The 2024-25 Budget: Temporary Corporation Tax Increases May 17, 2024
The May Revision proposes to temporarily increase corporation tax revenues by limiting the use of business tax credits and net operating loss deductions. This post analyzes those proposals. We think the proposal to limit use of tax credits is worth serious consideration. On the other hand, the proposal to limit net operating loss deductions raises concerns. In response, we suggest the Legislature consider alternative ways to raise revenue should it wish to pursue revenue solutions.
Inflation Tracker May 17, 2024
April data suggests a modest reversal of the recent uptrend in inflation. However, inflation remains above the pre-pandemic norm. Prices in California largely have tracked with this national trend.