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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 have been near historic lows throughout 2018. December claims continued to be low by historic standards. In December 2018, California had 184,000 unemployment claims. (We apply a “seasonal adjustment” to the claims data because some months are predictably higher or lower than others.)  

Although December claims remained low by historical standards, claims have ticked up slightly in the last couple months. In October the state had 169,000 claims (after seasonal adjustment), increasing to 176,000 in November, and 184,000 in December. It is too soon to draw any conclusions from this uptick in claims, but given recent slowing in some other economic indicators—such as housing permits and sales—it would be worrying if the uptick were to continue into early 2019. As the graph below shows, unemployment claims typically rise consistently for six months leading into a recession.

Source: United States Department of Labor with LAO calculations


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