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Monthly Jobs Report March 28, 2025
California's traditional jobs report suggests the state shed 7k jobs in February, and the prior month's report was revised down from 0 to -21k jobs. Our hybrid measure that has more closely tracked final jobs data suggests the state has added no net jobs over January and February. The state's unemployment rate held at 5.4 percent.
Updated "Big Three" Revenue Outlook February 20, 2025
Upside to Governor's Budget Revenues. Driven by the stock market, recent income tax collections have been decidedly strong. Reflecting this trend, our revenue outlook continues to improve and now suggests there is upside potential relative to the revenues assumed in the Governor’s Budget. Whether or not the stock market surge underpinning these revenue gains is sustainable is impossible to say, but several hallmarks of prior unsustainable stock market booms appear present today.
California Housing Affordability Tracker (4th Quarter 2024) January 15, 2025
Our post provides an updated snapshot of housing affordability in California. Over the last few years, we have seen a rapid increase in California housing costs, led by the dramatic increase in the costs of purchasing a home. Monthly costs for a newly purchased home are about $2,600 higher than they were just a few years ago, driven both by increases in home prices between 2020 and 2022 and an increase in mortgage rates since 2022.
The rapid increase in mortgage rates in 2022 has also left most existing homeowners "locked-in" to mortgages with rates significantly lower than currently available. More than 80 percent of California homeowners have mortgage rates under 5 percent, compared to current rates of about 7 percent. These homeowners face a significant additional financial cost to moving, further limiting the number of homes available for sale.
Inflation Tracker December 16, 2024
November data shows inflation in the US and California is trending upwards but remains lower than post-pandemic highs. Relative to the US as a whole, housing prices have grown less in California since 2020 but utility prices have grown more.
U.S. Retail Sales Update: October 2024 November 15, 2024
U.S. retail sales have grown 1.1 percent over the last 3 months and 2.8 percent over the last 12 months. Retail sales growth has outpaced inflation substantially over the last 3 months, but only slightly over the last 12 months.
U.S. Retail Sales Update: August 2024 September 17, 2024
U.S. retail sales have grown 0.9 percent over the last 3 months and 2.1 percent over the last 12 months. Retail sales growth has outpaced inflation over the last 3 months, but not over the last 12 months.
U.S. Retail Sales Update: July 2024 August 16, 2024
U.S. retail sales have grown 1 percent over the last 3 months and 2.7 percent over the last 12 months. Retail sales growth has outpaced inflation over the last 3 months, but not over the last 12 months.
Did California Enter a Recession Last Fall? October 3, 2023
While recessions are not formally defined for state economies, economic data for the fourth quarter of 2022 and first quarter of 2023 appear consistent with California experiencing a mild recession. The apparent start of a recession in California last fall helps explain why the state faced a revenue shortfall in its most recent budget. How much the economy will continue to dampen the state's fiscal picture moving forward is unclear. However, the threat that the recent slowdown could persist will be a significant risk for the foreseeable future.