California businesses added 16,000 jobs in December, following a relatively sluggish November (+20k jobs). Though businesses continue to hire, recent reports send mixed signals. From July to December, businesses reported adding 230k jobs. At the same time, 100k fewer Californians reported having work.
Based on the most recent revenue and economic data, we currently estimate that collections from the state’s “big three” taxes—personal income, sales, and corporation taxes—are likely to fall below the Governor's Budget assumption of $200 billion in 2022-23.
Despite worrying signs in some parts of the economy, the labor market remains steady. Seasonally adjusted weekly UI claims held steady over the last several months at between 40,000 and 50,000 claims per week. This level is in-line with UI claims seen during periods of sustained economic growth.