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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 September 2018, California had 175,000 unemployment claims. September claims fell below the average of the past 12 months (180,000), as well as the five-year average (206,000). As shown on the left side of the graphic below, unemployment claims have trended downward 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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