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 over year. January 2019 claims continued to be low by historic standards. In January, California had 178,000 unemployment claims. (We apply a “seasonal adjustment” to the claims data because some months are predictably higher or lower than others.)
Claims ended 2018 on a slight upward trend, increasing from 169,000 (after seasonal adjustment) in October to 176,000 in November and 184,000 in December. January claims departed somewhat from this trend, declining 3 percent from December. That being said, claims were about 3 percent higher in January than six months prior. As the graph below shows, unemployment claims typically rise over the six months leading into a recession. The slight uptick over the most recent six months, however, is more modest than the typical increase leading into a recession. On average, claims increase 8 percent over the six months leading into a recession.
Source: United States Department of Labor with LAO calculations