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Unemployment claims are a useful indicator of the health of the state’s economy. As the figure below shows, unemployment claims currently are low by historical norms. (We apply a “seasonal adjustment” to the claims data because some months are predictably higher or lower than others.)

Monthly Unemployment Claims in California

In July 2018, California had 172,000 unemployment claims. July claims fell below the average of the past 12 months (182,000), as well as the five-year average (208,000). As shown on the left side of the graphic below, unemployment claims had a slight downward trend over the past 12 months. In contrast—as the right side of the graphic below shows—unemployment claims typically rise leading up to a recession. The recent claims data, therefore, appear to offer little evidence that an economic slowdown is likely in the coming months.

Source: United States Department of Labor with LAO calculations.


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