Monthly Jobs Report December 20, 2024
California's traditional jobs report suggests the state added 11,000 jobs in November, while a hybrid measure that has more closely tracked final jobs data suggests a small jobs decline for the month. The state's unemployment rate remained at 5.4 percent, but the data underlying this figure show some clear weaknesses: the labor force contracted in November, at the same time that fewer workers reported being employed and more reported being out of work.
Inflation Tracker December 16, 2024
November data shows inflation in the US and California is trending upwards but remains lower than post-pandemic highs. Relative to the US as a whole, housing prices have grown less in California since 2020 but utility prices have grown more.
Data Revisions Shows Monthly Survey Again Overstating Job Growth December 16, 2024
Since mid-2022, the state's monthly jobs survey has tended to overestimate actual employment growth. The data revision from the first quarter of 2024 gave some hope that this pattern was correcting, but the newest incoming data show the monthly survey again overstating employment. Specifically, the most recent match to administrative records shows the survey overestimated job creation from March through June this year by roughly 150,000 jobs (preliminary survey gain of 68,000 relative to matched net loss of 78,000 jobs).
Income Tax Withholding Tracker December 6, 2024
Recent PIT withholding covering November came in substantially higher than last year, by as much as $1.9 billion (22 percent). However, the official November monthly tally fell far short of projections included in the 2024-25 Budget Act because this year's Thanksgiving holiday fell uncommonly late in November. Our best assessment of underlying cash trends (adjusted for this timing issue) indicate recent withholding continues to outpace budget projections.
Cannabis Tax Revenue Update (2024 Q3) December 3, 2024
Our new forecast for 2024-25 cannabis tax revenue is $653 million, somewhat lower than the May Revision forecast of $695 million.
Update: Tech Company Equity Pay Driving Withholding in 2024 November 20, 2024
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 and restricted stock units, in addition to their base salary. As we first pointed out a year ago, state income tax withholding on equity pay has grown notably in recent years due to the AI boom in asset prices for these companies. With updated data from early 2024, we now believe withholding from these sources reached about 10 percent of all income tax withholding during the first half of 2024.
U.S. Retail Sales Update: October 2024 November 15, 2024
U.S. retail sales have grown 1.1 percent over the last 3 months and 2.8 percent over the last 12 months. Retail sales growth has outpaced inflation substantially over the last 3 months, but only slightly over the last 12 months.
California Housing Affordability Tracker (3rd Quarter 2024) October 23, 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. While recent interest rate declines have led to a slight moderation in costs, they remain high relative to pre-pandemic levels. Monthly costs for a newly purchased home are about $2,400 higher than they were just a few years ago. Annual income needed to qualify for a typical home is about $221,000—over 2 times higher than median household income (about $96,500).
U.S. Retail Sales Update: September 2024 October 17, 2024
U.S. retail sales have grown 1.7 percent over the last 3 months and also 1.7 percent over the last 12 months. Retail sales growth has outpaced inflation over the last 3 months, but not over the last 12 months.
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.
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.