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.)
In October 2018, California had 168,000 unemployment claims (after seasonal adjustment). October was the second lowest month for claims in the past decade. As shown on the left side of the graphic below, unemployment claims have trended downward over the past 12 months. Last October, claims totaled 183,000. 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